Former President Donald J. Trump is certainly no stranger to controversy. Both his presidential campaign and his time in the White House kept him and his family constantly on the news. Now, as he faces indictment in New York, it is an interesting question whether Trump should consider asset protection. Let’s do an analysis of his situation to determine whether asset protection solutions would be right for Trump.
Does Trump have Assets?
Although the actual net worth of Donald Trump is not publicly known, he is widely considered to be the richest U.S. President of all time. As of April of 2023, Forbes estimates Trump’s net worth at around $2.5 billion dollars. Regardless of the accuracy of these figures, we can be confident that President Trump has sufficient wealth to warrant serious asset protection measures. Although asset protection is most needed for those with between one and ten million in net worth (these are the people who can’t afford judgments and need settlement leverage) he could use it too.
Does Trump have Risks?
President Trump acquired most of his wealth by investing in real estate which can be a risky and volatile asset class. Several of Trump’s companies have filed for Chapter 11 bankruptcy protection over the years. Chapter 11 means a company can remain operational while many of its debts are wiped away. In 1991, Trump’s Taj Mahal Hotel in Atlantic City filed for bankruptcy. The following year two other Trump owned Atlantic City casinos declared bankruptcy. In 1992, the Plaza Hotel in New York, declared bankruptcy after being unable to service its debts. In addition to his business risks, President Trump has been through two divorces.
Trump’s Risk Tolerance
Another important aspect to consider is the individual’s personal risk tolerance. While some clients might be comfortable with higher risk levels, others are much more conservative, even if their risk is only low or moderate. As we have seen, President Trump has not been one to shy away from risky business endeavors over the years. However, as he is now older, he simply does not have time now make his money back in case of a substantial drawdown in his net worth. For this reason, it is wise to consider asset protection solutions regardless of personal risk tolerance.
Optics refers to how a certain legal course of action could be interpreted by the courts or by the public. In the case of a widely known person such as President Trump, optics is a much larger concern. As the Former President of the United States of America, Trump’s opinion on the fairness of the U.S. legal system carries a lot of weight. Deciding to move wealth to an offshore trust is an unspoken admission that the U.S. courts are inherently riskier. That being said, most would agree that President Trump was not a typical U.S. president. Both during his campaign and during his time in office Trump was highly critical of entrenched powers in Washington D.C. Trump could defend his asset protection planning as a way to defend himself and his family from political opponents in the government or elsewhere.
Since President Trump has already been indicted it is likely too late to put together an asset protection plan that would help with this current legal matter. Based on the above analysis, President Trump should wait before engaging in Asset Protection planning, at least until the current indictment is resolved. If all charges were dropped, I’d welcome his call.