Zen and the Art of Asset Protection

Zen:  1. a state of calm attentiveness;
2. an approach to life that emphasizes calm simplicity;
3. a state of peacefulness or relaxation”

Imagine, if you will, that you’ve lost a major lawsuit and the jury has awarded the plaintiff a multimillion-dollar judgment.  You now find yourself sitting in the conference room of a large law firm facing an army of highly paid lawyers who are Hell-bent on seizing everything you own – everything you’ve worked for your entire life.

Imagine further, that your own attorney tells you that you must disclose the amount, type, value and location of every asset that you own.  He also tells you that we live in a digital age, that nearly all assets today leave a digital trail, and that there are companies that lawyers can use to find them.

The plaintiff’s lead lawyer then leans in, looks at you, and warns you that any refusal to answer their questions will subject you to contempt proceedings and that lying or giving a false or evasive answer will expose you to civil liability and criminal prosecution for perjury.  

For most, this nightmare scenario would be an unmitigated disaster; a life altering catastrophe.  

If you were to find yourself in this circumstance, would you be calm and in control?  Or would you be in need of an oxygen mask and a blood pressure cuff?

Now, imagine being able to stare down the lawyers in that room with calm detachment, placing your hand on a bible and swearing truthfully and under oath that you own nothing.  Nothing!  Then, to the astonished looks on the faces around the room, being able to rise from the table, walk out the door to your chauffer driven limousine, drive home to your country estate and enjoy a night of untroubled sleep.

Welcome to the Zen of Asset Protection

Nelson Rockefeller once famously quipped “The secret to success is to own nothing, but control everything.”  Well, Nelson knew what he was talking about. 

His grandfather, John D. Rockefeller, founder of the Standard Oil Company amassed the greatest personal fortune and the largest business empire America had ever seen through a series of interlocking trusts, corporate vehicles and other legal structures. (Hat Tip to Rockefeller’s attorney, Charles C. T. Dodd, Esq.)

“The secret to success is to own nothing, but control everything.”

– Nelson Rockefeller

By transferring ownership of his Standard Oil stock into the Standard Oil Trust, Rockefeller was able to circumvent certain state laws that were preventing him from owning and controlling other oil companies around the country.  By using the Standard Oil Trust, he was then free to purchase these oil companies.  Yes, he was a beneficiary of the trust.  Yes, he controlled the Standard Oil Trust.  Yes, he and his family could obtain money from the trust whenever he wanted.  Nevertheless, for legal purposes, he could put his hand on a bible and truthfully swear under oath that he did not the Standard Oil Company.

He owned nothing… but still controlled everything.

By using the Standard Oil Trusts, Rockefeller went on to monopolize the entire U.S. Oil industry.  So powerful were these trusts that, by 1890, Standard Oil controlled 90% of the U.S. oil industry.  It finally took an Act of Congress[1] to break up Rockefeller’s monopoly. 

These trusts, corporate vehicles and other legal devices are still available today to anyone who wishes to use them.  They are as effective and powerful today as they were in Rockefeller’s day and are used extensively throughout the country by wealthy families, individuals and multinational corporations to preserve, protect and defend their wealth from all who would try to seize it.

“He who owns nothing, is truly at peace.”

– Stephen Speiser

Well, to be more precise, “He who owns nothing in his own name is truly at peace.”  For if one owns nothing in their own name, then nothing can be taken from them.

Concluding Thoughts

In the final analysis, asset protection is more than a legal structure… It is peace of mind.  But to truly achieve that goal, asset protection needs to become a way of life – a guiding principle – that governs your daily thoughts and actions.  Learn to focus your mind on the plan we create together, on how to layer your asset protection shield over the business and personal financial decisions that you confront on a regular basis, and on how to constantly strengthen your plan.  We will always be here to answer your questions, teach you, and guide you.  There is a Zen to asset protection, and we want you to achieve it.  

[1] The Sherman Antitrust Act, 15 U.S.C. §1 et seq. (1890)