Jay Adkisson Is Right About Bad Planning. What His Article Leaves Out

Jay Adkisson's Forbes piece, Why Most Asset Protection Plans Are Junk, is worth reading. He has reviewed these plans from several angles: as creditor's counsel, as debtor's counsel, and as the second opinion other planners call in when something looks wrong. When he says most of what he sees is defective, that is worth taking note of.

We agree with more of it than the industry will admit. Where the article stops short is on cause. His list of defects describes symptoms; it does not get to why those plans were built that way, or name the products where it happens most reliably.

Where We Agree

Asset protection is oversold. Adkisson is correct that a large share of the people who buy a plan never needed one, or needed something far simpler than what they were sold. Someone in a state with generous homestead and retirement account exemptions, sitting behind adequate liability and umbrella coverage, may already be more protected than they realise. The first conversation with any honest planner should include the possibility that the right answer is that the client does not need this, or needs far less of it than they think.

The industry has real scammers in it, and it is not limited to lawyers doing bad legal work. A meaningful share of the marketing in this space comes from people with no licence to practise law at all: marketers and seminar promoters who sell "asset protection" with no real legal training behind their work.

One firm, Asset Protection Planners, operating as a trade name of Lawyers Limited PLLC, states plainly in its own site disclaimer that "not all team members are attorneys" and that certain services, including entity formation and document preparation, are "non-attorney business services provided through an affiliated service company."

That disclosure is not an accusation. It is their own words, and it illustrates the issue directly: a client calling an "asset protection" brand cannot assume the person drafting or assembling the plan is a licensed attorney at all, let alone one competent in trust law. Asset protection is not something that should be handled as a document assembly service, and clients rarely learn how thin the underlying expertise is until a creditor tests the plan.

Domestic asset protection trusts are the weaker option, not the safer one. This deserves more emphasis than Adkisson gives it. States like Nevada, South Dakota, Delaware and Alaska will sell a self-settled spendthrift trust and call it asset protection. A domestic asset protection trust still sits inside the United States court system. Federal bankruptcy law can override state trust law. A federal court can compel the trustee to distribute assets regardless of what the trust document says. And a settlor living in a state that does not recognise these trusts can find a court simply applying the settlor's home-state public policy instead of the friendlier trust situs law.

A domestic trust's protection depends on the goodwill of a court system the debtor never actually left.

Cases settling is not proof of a bad plan. Adkisson notes that fewer than one in a hundred asset protection plans ever faces a real creditor challenge, and he treats that low number mostly as a reason planners get complacent. That is a fair concern, but it skips the other half of the picture. A well-built plan is not designed to end in a published court decision. It is designed to change the negotiating table before litigation goes far. A creditor looking at years of foreign litigation, an unfavourable burden of proof, and a real chance of walking away with nothing will often settle for a fraction of the judgment rather than chase it.

That settlement is not evidence the plan failed or was never tested. In many cases it is the plan working exactly as intended: it gave the client leverage to negotiate from a position of strength instead of paying a judgment in full. Judging planning quality only by the rare case that goes to a full court test misses the much larger number of cases where the plan did its job quietly, at the negotiating table, and nobody ever wrote an opinion about it.

Where the Article Stops Short

Adkisson's list of defects — cookie-cutter plans, empty and unfunded trusts, the do-it-all structure, puppet fiduciaries, plans that suffer from neglect — describes symptoms.

Most of the plans he describes were not built badly by accident. They were built badly because the business selling them was not actually an asset protection practice. A business built for volume and inflated fees has no real incentive to fund the trust properly, review it annually, coordinate with an independent trustee, or match the structure to the client's actual needs.

The Bridge Trust®

This is where a specific product deserves closer examination: the Bridge Trust®, a trademarked term for a successor-trustee or trigger trust, marketed across the industry as a hybrid between a domestic and an offshore trust.

In ordinary, day-to-day operation the Bridge Trust® is a United States domestic trust. It is formed under the law of a state such as Nevada or South Dakota, and often administered with the client serving as trustee. The instrument names an offshore entity, typically in the Cook Islands, as successor trustee. The idea is that if a Protector later declares an event of duress, authority passes to that offshore trustee and the trust converts to Cook Islands status.

Registration under the Cook Islands International Trusts Act is what actually confers Cook Islands trust status. A trust deed that merely names a Cook Islands entity as a successor trustee does not, by itself, register the trust under that Act. Until the foreign trustee takes an active role — as opposed to a successor position — the trust remains domestic and remains subject to United States court jurisdiction.

The offshore entity is named only as successor trustee, which means it holds no present authority and, as a regulated fiduciary in its own jurisdiction, is required to run fresh due diligence and has discretion to decline the appointment when the triggering event actually occurs. Even where the offshore trustee does accept, any assets still physically held in the United States at that moment remain reachable by a domestic court, which can issue a temporary restraining order freezing the conversion before it completes.

This means the product's core marketing claim — that a client gets offshore-level protection on demand without giving up domestic simplicity — depends on several discrete steps, each of which can fail, and several of which are outside the client's control.

Anyone evaluating a hybrid structure like this should ask their attorney for two specific things in writing: confirmation of whether the offshore entity is named as current trustee or only as successor trustee, and a written, unconditional commitment from that offshore trustee and an offshore bank to accept the role, rather than relying on marketing language describing how the mechanism is supposed to work.

Misrepresented Case Law

Also of concern are attorneys like Steve Oshins, who have repeatedly misrepresented offshore case law. This may have been done in an attempt to steer more clients to risky planning tools he promotes, such as his HybridDAPT.

While Oshins claims the HybridDAPT "fixes the problem" of domestic trusts, the reality is that pretty much all of the same issues that exist with traditional domestic asset protection trusts still exist with HybridDAPTs. The main issue being that a trustee will fold under pressure from a U.S. court.

What Good Planning Actually Looks Like

The fix for bad planning was never "no planning." It is planning done by people whose core practice is exactly this work and who have no reason to cut corners. A firm that treats asset protection as its practice rather than as a side product does a few things differently by default.

The trustee is offshore and independent. Not a family member, not a financial advisor, not someone who reports to the client, and not someone who is going to fold under pressure from a U.S. court. An independent, licensed trustee operating offshore is what keeps a structure legitimate, solid and in good standing. What to verify is set out in how to choose a Cook Islands trustee.

The plan gets funded, and it gets reviewed. A trust nobody funded is worthless, and a trust nobody has reviewed in six years risks deteriorating in ways the client will not notice until it is too late to fix. Your law firm and trust company should begin opening offshore accounts and funding the trust as soon as it is established.

The jurisdiction is chosen for enforcement history, not marketing. Nevada and Wyoming sound convenient, but clients need protection rather than convenience. The Cook Islands, Nevis and Belize are the jurisdictions worth considering for clients seeking genuine protection — and the reasons differ between them, which we set out in how to choose an offshore trust jurisdiction.

The Real Takeaway

Adkisson's core point stands. A lot of asset protection plans are junk, and the industry still has some bad actors in it.

Where we part company with him is on sequence: he places asset protection fourth, behind litigation defense, and the pricing logic in his own argument is the reason it belongs in front of it — see asset protection belongs before litigation defense.

The lesson is to work with people whose incentives are actually aligned with the plan surviving a real fight — whether that fight happens in a courtroom or at a settlement table — and to be specifically wary of anything marketed as a clever structure that solves everything.

If you want a straight assessment of whether your own plan would hold, or whether you need one at all, talk to our attorneys.