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Introduction to Privacy Plan

INTRODUCTION

RECENT ADVANCES IN COMPUTER and Internet technology allow unprecedented access to your most sensitive personal and financial information. Detailed information describing all of your real estate and business interests, the name of your bank and brokerage firm, your account balances, and your transaction history can be accessed and assembled without your knowledge or permission. Now, anyone can find out what you have and how much you are worth.

These capabilities are a new phenomenon. Until recently, separate bits and pieces of information about your life were scattered in dusty file drawers and county records around the country. Your birth certificate, driving records, insurance file, marriage licenses, and loan applications were maintained or stored in written files, record books, or sometimes the computer at the office where the records were kept. Information could not be accessed from outside the office where the records were stored.

If you or somebody else wanted information from your birth certificate, you had to physically go to the records office in the county where you were born and look through the indexed records. An investigator attempting to assemble information about your life had to travel from one county courthouse to another, stand in line, search through library archives and public records, and hope to come up with some useful information. The process of gathering personal information was a laborious and expensive job.

But all of that has changed. The scraps of paper and the written records have been converted into an electronic form which can be stored and searched by a computer. And these computers and the databases have been connected through the Internet so that the information in any one computer can be accessed and searched from any other computer.

If somebody wants to find out information about you, a single query will hunt through billions of documents stored on thousands of interconnected databases to produce a frighteningly thorough profile of your life. An investigator can now sit in the comfort of his office with a computer, a modem, and a cup of coffee in one hand, and in minutes he will have everything about you that he needs to know.

The accessibility of specific information about asset ownership creates direct and indirect threats, which can jeopardize financial security and physical safety. Detailed financial information including real estate and stock holdings and complete bank records can act as a magnet for lawsuits, frivolous claims, and unreasonable demands from a variety of sources.

In fact, this availability of financial information is the principle source of fuel for the “litigation explosion.” Lawsuits and claims are often filed simply because it is known that the defendant is a “deep pocket” with the capacity to pay a judgment. Regardless of who is really responsible for the alleged wrong, the defendant will always be the party with the ability to pay a judgment.

If someone is able to locate specific information about your assets, you become an attractive and vulnerable target for a lawsuit or claim. The most common and dangerous abuse of your financial information is related to the litigation process. Whether or not a lawsuit is filed as well as the strategy of the case depend largely on the ability to accurately determine what you have, where it is located, and how much it is worth.

Lawyers aren’t the only ones who want to know what you have. Business associates and competitors may have a vital interest in learning how much you are making and where you are spending money. An ex-spouse may need information to bolster the case for an increase in alimony or support payments. An unhappy current spouse will be advised to find account balances and locations before serving the divorce papers. Criminals uncover and evaluate financial accounts in a variety of schemes to defraud unsuspecting victims. Perhaps an elderly parent or relative will be victimized by these practices.

Our solution to these problems is to develop legal strategies which accomplish two important objectives: The first goal is to create financial privacy. Nobody should be able to find out what you own unless you tell them. Information about your bank accounts, stocks, real estate, and business interests should not be accessible by any outside party. A properly designed financial privacy plan allows you to control the flow of your personal information — to keep it out of the hands of dangerous people.

Second, we want to construct a legal firewall around all of your valuable assets. We want to shield and insulate assets from the potential danger of lawsuits and claims. If you are the target of a lawsuit, for whatever reason, your property should be protected from a judgment.

During the past year, there has been a rash of media stories and Congressional hearings into the dangers caused by the availability of sensitive financial information. In response to this heightened awareness of the problem, we have witnessed an explosion of demand for legal strategies designed to protect financial privacy and shield personal assets from lawsuits and other attacks. A considerable portion of our practice over the last twenty years has been devoted to these issues, and this book is intended to present the solutions we have seen and developed over the years.

In chapters 1 and 2, we will show you how personal information about you is located. You will learn the tools and the techniques used by investigators and “information brokers” to uncover your bank accounts and other private financial data. We will look at the reasons why somebody wants this information about you — and what they can do with it to harm you.

In chapters 3 and 4, we will examine the lawsuit danger in greater detail. We will see how a lawyer uses private information about your financial matters to evaluate a case, and then what really happens during a lawsuit.

Beginning in chapter 5, we will turn our attention to the strategies that are commonly employed to achieve financial privacy and asset protection purposes. We will look at corporations, Limited Liability Companies, Family Limited Partnerships, and a variety of trust arrangements and offshore plans.

We will concentrate attention on a powerful strategy known as the Privacy Trust, which allows us to create an excellent level of privacy and asset protection in the most flexible and convenient format.

As a word of caution, this book cannot possibly substitute for competent legal advice. Our treatment of the law is general and is not intended as a comprehensive discussion of all relevant issues. The law in each state will vary to some extent, and the applicability of the law will depend upon your individual circumstances.

The Privacy Plan gives you the best insider advice from top experts in the field. It is your personal guide for taking back your financial privacy and protecting what you own

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