¶ 5101
Overview
Scope of the chapter. This chapter applies the method of the treatise to the clients who most often seek asset protection: physicians and dentists, founders of businesses, executives of public companies, lawyers, accountants and financial professionals, real estate developers and contractors, owners of vehicles, aircraft and rental property, entertainers and athletes, public officials, and retirees and inheritors. For each profile it identifies the creditors the client is likely to face, the extent to which those claims are insurable, the claims that no entity or trust will defeat, and the cases in which planning by clients of that profile has failed. It closes with a summary of the profiles in the Threat Matrix.
Why profiles matter. The Threat Matrix analyzes each tool against a named creditor class at a named time (see supra ch. 2). A client's occupation is the best single predictor of which creditor classes will arise and when. It also determines what the client can lawfully transfer, since a physician's malpractice history, a founder's investor obligations and an executive's insider-trading restrictions each limit the timing and form of protective transfers. Profiles are a starting point. The planner must still examine the individual client's liabilities, assets, family and history (see infra ch. 52).
A recurring lesson. The reported cases in which planning by these clients failed rarely turn on defects in the trust instrument. They turn on four matters. The first is timing: a transfer made after the claim, or the financial distress that produced it, was visible. The second is the forum's own public policy, which has led courts in the settlor's home State to refuse to apply the law chosen by the trust (see supra ch. 35). The third is the court's power over the person of the settlor, which allows it to award a spouse or creditor the value of trust assets out of the settlor's other property or to compel the settlor's cooperation by contempt (see supra ch. 39). The fourth is the character of the liability: claims that are personal, statutory and excepted from discharge, such as False Claims Act judgments, construction trust fund liabilities and securities fraud debts, which no entity or trust shields. Each profile below is assessed against these four matters.
Relation to other chapters. The classes of creditors are described in chapter 4 (see supra ch. 4), the treatment of future creditors in chapter 5 (see supra ch. 5), spouses in chapter 9 (see supra ch. 9) and the government in chapter 10 (see supra ch. 10). Business structures for practices and companies are addressed in chapter 47 (see supra ch. 47), real estate in chapter 48 (see supra ch. 48) and digital assets in chapter 49 (see supra ch. 49). Intake and the solvency analysis are addressed in chapter 52 (see infra ch. 52), and the cases in which plans have failed are collected in chapter 55 (see infra ch. 55).