Doyle, Asset Protection

I do not think of myself as an asset protection lawyer. But, after reading Kelly R. Doyle, Asset Protection, LexisNexis Canada Inc., 2005, available here, I realize that as an estate planning lawyer, I deal with asset protection on several levels.

I have often suggested to clients who have concerns about the stability of their children’s marriages, or businesses, that they consider setting up trusts for their children instead of leaving outright gifts in their wills. I help plan for the possibility that my clients will lose their capacity to look after themselves. I also give advice to clients about minimizing their risks of successful lawsuits against them, or against their estates.

In his book, Kelly Doyle deals with professional responsibility issues, risk management analysis, and substantive areas of law including taxation, offshore trusts, family law, insolvency, and estate planning.

I find the ethical issues he raises most challenging. We are not allowed to transfer assets with the intent to “delay, hinder or defraud creditors.” There are civil and criminal consequences. Where is the line between legitimate estate planning and asset protection on the one hand, and fraud on the other? He does not offer a bright line test—and I doubt that there is one. He does say that lawyers have to ask the right questions.

For example, he says that in context of advising on the transfer of assets as part of an estate plan, the lawyer needs to ensure that:

…transfers are not being made with the intent to delay, hinder or defraud creditors. If the settlor [the person transferring the assets] does not volunteer the reason for the transfer, it should be requested. If the lawyer is dubious as to the reasons for the transfer which are offered by the settlor, the financial circumstances of the settlor at the time of the proposed disposition should be considered. If the settlor is insolvent or is in questionable financial circumstances, the provisions of provincial fraudulent conveyance and preference legislation, the Bankruptcy an Insolvency Act and the Criminal Code should be summarized for the settlor so that he or she is well aware of those provisions. If the lawyer believes that the disposition is being made to avoid creditors, he or she must refuse to act...

You do not need to be a lawyer to read this book, which I think should also be of interest to accountants, risk managers and financial planners.

Mr. Doyle is a lawyer in Vancouver, British Columbia. For more information about Kelly Doyle, and his firm Doyle Professional Law Corporation, their website is here.