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• Author: Nelson, Barry A.

Lawyers have different views about asset protection planning. Some feel it is an area they and their firms will not include in their practice. Mention asset protection planning to certain lawyers and they wince. The impression is that it is a "dirty" practice area and that those who engage in it are the ambulance chasers of the estate planning bar. Perhaps so as not to give offense, the Real Property, Probate and Trust Law Section of The Florida Bar named its committee focusing on asset protection and related issues the "Asset Preservation Committee."

The Asset Preservation Committee brings you a special series of articles in The Florida Bar Journal addressing, on a timely basis, the consequences of the 2005 Bankruptcy Act on issues such as homestead, retirement plans, limited partnerships, and other related areas.

This article is intended to enlighten Bar members on a number of methods frequently used by estate planning attorneys who have gained additional training in techniques to insulate clients' assets, within the limits of the law, from potential future creditors' claims. Like any area of law, most attorneys assisting their clients with asset protection planning are aware of the laws and provide advice based upon existing statutes, whether local, federal, or international (or combination). Most asset protection lawyers are aware of the ability to create a "safety net" around a portion of clients' assets prior to their incurring a contingent or actual liability. A majority of clients seek legal advice when there is no existing or contingent liability, but, instead, because they are concerned about what could occur in the future, especially in today's litigious society.

Certainly there are attorneys who are aggressive and skirt the limits of the law or go beyond them. Even reputable Bar members disagree on the ethics of asset protection planning and an attorney's ability to assist his or her clients, especially after a liability already exists. As indicated in Freeman v. First Nat'l Bank, 329 F. 3d 1231 (11th Cir. 2003), there is no cause of action under Florida's Uniform Fraudulent Transfer Act ("FUFTA") for aiding and abetting a fraudulent transfer when the party assisting in the transfer is not a transferee.

Does Freeman insulate attorneys from liability for any asset protection advice they may provide to clients? A prior article in The Florida Bar Journal seemed to suggest just that, concluding "[a]s to an attorney's previous concerns regarding exposure to third party liability claims and ethical considerations involving client transfers under FUFTA, following Freeman an attorney may be deemed to have an affirmative duty to competently advise clients as to their rights under the law so a client may acquire, possess, and protect property." (1)

The Florida Supreme Court in Freeman concluded that FUFTA was not intended to serve as a vehicle by which a creditor may bring a suit against a nontransferee party for money damages arising from the nontransferee party's alleged...