Enhancing Asset Protection Through Legal Expertise With Douglass Lodmell

May 1, 2024 | Written by Gladiator Law Marketing

Douglass Lodmell

Douglass Lodmell is the Managing Partner at Lodmell & Lodmell, a law firm specializing in sophisticated domestic and international asset protection structures. Born in Geneva, Switzerland, and holding a JD from Cardozo School of Law and an LLM in taxation from New York University School of Law, Douglass has a comprehensive background in estate planning, taxation, and strategic asset protection for a diverse range of clients. As an author and a regular speaker at national events, he’s an educator on asset protection strategies and the intricacies of the legal system. Douglass’ professional journey includes clerking for the Honorable Jack Weinstein in the Eastern District of New York and co-founding his firm, which today protects over $4 billion in client assets.

Here’s a glimpse of what you’ll learn:

How Douglass Lodmell got started in the legal industry
The challenges of working with family in a business setting
Douglass talks about his book and what inspired him to write it
The initial steps involved in asset protection
How does estate planning fit into asset protection?
Douglass’ advice for people who want to start building their asset protection structure

In this episode…

What if you could safeguard your assets against the unpredictability of legal disputes? As individuals amass wealth, the fear of losing it to legal complications becomes a pressing concern. How can one integrate strategic legal planning to ensure asset security and peace of mind?

According to Douglass Lodmell, a leading authority in asset protection law, the answer lies in proactive legal structuring. Douglass emphasizes that effective asset protection should be implemented before estate planning. This approach allows for the establishment of a fortified legal framework that not only safeguards assets but also seamlessly integrates with future estate planning. By prioritizing asset protection, individuals can create a durable barrier that enhances their financial stability and legacy planning.

In this episode of 15 Minutes, host Chad Franzen speaks with Douglass Lodmell, Managing Partner at Lodmell & Lodmell. They talk about the essentials of asset protection, the interplay between asset protection and estate planning, and innovative strategies for safeguarding personal and family assets. Tune in to learn about the critical aspects of legal protection, the importance of timely asset structuring, and insights into maintaining long-term asset security.

Resources mentioned in this episode:

Sponsor for this episode…

This episode is brought to you by Gladiator Law Marketing, where we deliver tailor-made services to help you accomplish your objectives and maximize your growth potential.

To have a successful marketing campaign and make sure you’re getting the best ROI, your firm needs to have a better website and better content. At Gladiator Law Marketing, we use artificial intelligence, machine learning, and decades of experience to outperform the competition.

To learn more, go to gladiatorlawmarketing.com or schedule a free marketing consultation. You can also send an email to adam@gladiatorlawmarketing.com.

Episode Transcript

Intro 0:01

You’re listening to 15 Minutes, where we feature community leaders sharing what the rest of us should know but likely don’t.

Chad Franzen 0:08

Hi. Chad Franzen here, one of the hosts of Share Your Voice where we talk with top notch law firms and lawyers about what it takes to grow a successful law practice. This episode is brought to you by Gladiator Law Marketing, delivering tailor made services to help you accomplish your objectives and maximize your growth potential. To have a successful marketing campaign and make sure you’re getting the best ROI, your firm needs to have a better website and better content. Gladiator Law Marketing uses artificial intelligence, machine learning, and decades of experience to outperform the competition. To learn more, go to gladiatorlawmarketing.com where you can schedule a free marketing consultation. Douglass Lodmell is the managing partner at Lodmell & Lodmell, PC. Born in Geneva, Switzerland, he holds a Juris Doctorate from Cardozo School of Law, Douglas specializes in estate planning, taxation and strategic asset protection for both domestic and international clients. He is author notably of the lawsuit lottery, the hijacking of justice in America. With his extensive experience, Douglas is a frequent guest speaker at various professional conferences and seminars across the country. He also shares his knowledge and asset protection with other attorneys through continuing legal seminars. Doug, thanks so much for joining me today. How are you?

Douglass Lodmell 1:26

Yeah, my pleasure Chad. I’m good.

Chad Franzen 1:28

Hey, tell me when did When and how did you know you wanted to become an attorney?

Douglass Lodmell 1:33

That’s funny. So my father’s an attorney. And I assumed I would never want to be an attorney. So I didn’t even consider it. I just didn’t even think about going to law school. And then I was working in New York, I was doing with Wall Street doing risk risk risk management. And I wanted to get married. And I started thinking about how I’m going to support a family. And all of a sudden, I thought of law school, I thought, Well, maybe it’s not such a bad idea. So from there I went and the rest is history.

Chad Franzen 2:10

Did you so you, obviously you applied to law school? How did you get started in the legal industry?

Douglass Lodmell 2:16

So again, my dad was an attorney. And so I did. I did really well, in law school. I’ve got lots of opportunities with the big firms in New York. I did, I did clerk with one of those firms and kind of got the vibe and lo que how does this work? I got the opportunity to clerk with Jack Weinstein in the Eastern District of New York, very, very famous district court judge, he wrote Weinstein on evidence, he’s kind of, you know, an icon, sitting in his chambers for six months every day gave me a really good insight into the actual legal system, how it works, what a courtroom really feels like, and what judges really do. And so it was just very interesting, because all that experience, I realized, gosh, I want to do something that is not in that is somehow helpful in the legal industry. Somehow I wanted to be the good guy, attorney, so to speak, right? Not the not the shark trying to take advantage of the system. Because it is it was it was apparent to me that taking advantage of the system is a big chunk of the legal profession. And so my father was doing asset protection. And we actually, you know, I didn’t intend to go in practice with him. But by the time I was in my last year I was in I was in practice with him. And that was it.

Chad Franzen 3:37

So I’m guessing Lodmell & Lodmell refers to you and your father. Correct?

Douglass Lodmell 3:41

Yeah, exactly.

Chad Franzen 3:42

How long have you guys been together? In terms of practice?

Douglass Lodmell 3:46

26 years of practice? Yeah.

Chad Franzen 3:49

Wow. Awesome. Is it? I guess, you probably wouldn’t know much difference. Is there a challenges that come with working with family, especially with a parent?

Douglass Lodmell 4:00

Yeah, there are challenges because, you know, you’re, you’ve got family dynamic. And I learned a lot through this process. And, you know, today a lot of what I learned, I also have two brothers, I started a company, my brother was involved with llama llama, my other brother and I started a company. And so I’ve got a lot of experience working with family. And what I’ve learned is, is that you’ve got to not treat family differently than you would treat a third party, outside partner, you’ve got to set up the rules, you know, all the all the guidelines for what it’s going to take to be successful. And, you know, especially the exit plan, so if somebody wants to kind of exit the active job, part of building the business and just be an owner, you got to segregate those two roles. You got to pay yourself for working in the business, and then you pay yourself a different amount of money for owning the business. That’s the trick. That was the key. I got it wrong the first time I got it right the second time and it really makes a huge difference. It’s something I tell clients all the time You know, and that’s whether it’s just a regular partner or family or anything else. I see people make that mistake. Everybody’s all in, okay, we’re just gonna do it. They don’t talk about the roles, and then somebody kind of once they become successful, somebody says, Oh, my part is really kind of done. But they haven’t you know, the guy who’s still managing is getting taking the same draws the guy who’s sitting on the beach.

Chad Franzen 5:21

Sure, sure. So hey, tell me a little bit about your book, The Lawsuit Lottery: The Hijacking of Justice in America. That’s, that’s a pretty bold, bold title. Explain the title for me, and kind of what inspired the book? What inspired the book?

Douglass Lodmell 5:36

Well, look, our legal system was designed by lawyers. I mean, the founding fathers were by and large lawyers. Lawyers, were they understood the risks of letting the lawyers get control of the system. Um, it was it was it was very apparent. And so there was very strong inside the Constitution provisions that really were designed to discourage lawsuits. Um, you couldn’t take contingent fees as attorney, the you couldn’t advertise, they didn’t want you drumming up business out there. The the ethical rules were extremely strict about about, you know, chasing ambulances, you can get disbarred, and you could get thrown in jail over it. And then, you know, the civil Rules of Procedure were made it very hard to file a lawsuit, you had to be very specific, you had to really know you couldn’t just throw something at the wall and see if it sticks. And, you know, I don’t think our modern lawyers noticed that that’s all gone. You know, 1964, Maine was the last state to lift the prohibition of a contingent fee for an attorney, advertising 1977. It was an Arizona case that that went to the Supreme Court, where law firm wanted to advertise. And they said, Well, okay, but you can only advertise your prices in your location. Well, we see how that’s out the window with you know, I got me $50 million from you know, Joe Blow and Joe Blow, they’re the best DUI attorneys in the country. The ethical rules were actually modified the the ABA, modify the the model ethical rules. And if you look specifically, at the part around ambulance chasing, they just changed a couple of words that completely gutted any kind of teeth, that that has in it. And then of course, there’s rules of civil procedure that used to make it very difficult to file lawsuits were twisted around. And now it’s very, very easy to file a lawsuit, you don’t even need to know what you’re suing for, you can just get into discovery and hope you can figure it out later. And look, there’s there’s some good reasons for all those changes. But by and large, they were driven by the plaintiffs bar, and the, you know, the desire to have more losses, which generates more revenue. In the book, I point out that 22%, only 22% of the money that ever goes to the legal system ever gets to the plaintiff, the the you know, the the aggrieved party, the rest of it is going to the lawyers and the system around it. You know, if you go to any conference, or you talk to any group of lawyers, by far, the wealthiest group of lawyers, the only lawyer that’s ever been on the fortune, you know, the billionaires list is they’re all plaintiff’s attorneys. And I don’t have anything against plaintiffs attorneys, I think they serve a very important function in society, we need to create that accountability. But I have seen firsthand plaintiff’s attorneys off the rails and it’s it becomes just purely about the money, our incentives around the legal profession have been twisted now. And unfortunately, I think it has taken our legal system off the rails and and now, if you have any kind of wealth in this country, I can tell you, people are scared, they’re scared is going to be taken from them through the legal system. And so you know, that’s really what what would cause me to pick the other side of the table and create, you know, a law firm that does the opposite. I protect assets.

Chad Franzen 9:02

Very nice. What, what would be like a primary takeaway, maybe you just maybe you just explained it? Like, how would what would be like an enlightening moment from the book, you know, like, okay, my perspective is different now. Or did you just or is that? Or is the perspective what you just shared?

Douglass Lodmell 9:18

Yeah, I mean, you know, it’s funny, because that book is very old. Now. It’s not, not recent. It’s been it’s been out for almost 20 years, maybe. So, you know, this is, this is something but it’s very much the same. I think I call it a legal extortion in the book. It’s pretty easy to use the legal system to extort money from people doesn’t take much if you sue somebody, and you ask for an amount of money that is anywhere within the realm of what it could cost them to defend. It’s cheaper to pay. And, and to me, that’s the definition of extortion. I’m going to do something to you. I’m going to make it worth your while. That’s what they’re doing when they steal your data, and they hijack you for it. Have your data back for this amount of money. It’s not too high to where you say no, you know, but it’s but it’s significant. The legal system has been doing that legally for years. I mean, that is our system. And so I see plaintiffs attorneys, that’s, that’s their business, they just sit there and sue people for, you know, just the right amount of money to where they can, they can pay it. Insurance companies have also been wrapped up into this. For years, I think we saw them kind of giving in to that. And then eventually, they started saying, No, we’re gonna, we’re gonna stop that, because this is, this has gotten out of hand. And again, it’s I don’t want the takeaway to be that I’m anti plaintiff, attorney or anti legal system, I think our legal system is is the foundation of our democracy. It’s incredibly important. But that’s why I’m, I’m I’m upset or sad, or discouraged that it has been hijacked, and we don’t have any controls on it. And you know, there’s no loser pay system. Chad, if I sue you, you run up to under 1000 legal bills, the odds of me being held responsible to pay back your legal bills, even when you win the case are close to zero. So, you know, what’s the disincentive for me to give it a shot?

Chad Franzen 11:09

Yeah, I see. Hey, as I mentioned, some of your specialties include estate planning, taxation and strategic asset protection. If you could just tell me kind of what what are the initial steps involved in asset protection?

Douglass Lodmell 11:26

So asset protection is is basically the area of law that takes your looks at your assets and says, can we structure your assets in such a way that should you end up with a liability of being no judgment against you, it would make it difficult, if not nearly impossible, for that a judgment holder to reach the asset, the goal being to create the leverage needed for a reasonable settlement, right. So asset protection is not just about telling everybody to go pound sand. It’s about creating, it’s about rebalancing the playing field, right. And so mostly, it’s used before we ever get to a trial. And, you know, some of the common things that you all know about, or LLCs are a form of asset protection, because, you know, if your assets are in an LLC, if done right, a plaintiff with a judgment against you can’t foreclose on the LLC and just go in and reach the assets, they can get a charge against your interest called a charging order. And this creates some level, right? So if you stack that up, and maybe use an LLC for your, you know, real estate investments, and then you use a holding company, and another in a different jurisdiction that has also very good charging order protections, now you’ve layered it up, so you’ve got two. And then on top of that, you know, asset protection heavily utilizes what’s called an asset protection trust. And that trust really can be done in three different ways it can be fully offshore in a jurisdiction like the Cook Islands, or Naevus, or Belize, it can be done fully domestically in a jurisdiction like Alaska, Nevada, Wyoming, Delaware, or it can be done in a hybrid fashion. So you know, my claim to fame is really the hybrid version of that, which is called a bridge trust. And what it is, is it’s a foreign asset protection trust that is bridged back and for tax purposes, treated like a domestic trust. And so it’s very simple to manage, but should it need to be used? It’s actually a foreign trust, and we just crossed the bridge, and we dropped the US jurisdiction, and now we have a foreign trust, which is really acknowledged as the strongest form of asset protection trust in the world.

Chad Franzen 13:26

How does estate planning fit into asset protection?

Douglass Lodmell 13:30

Yeah, that’s a great question. So estate planning is, for me, the way I see it is that asset protection is kind of do it first. Because you fund things differently. So if you do an estate plan with a revocable living trust, for example, you’re just your attorney is going to tell you put everything in the revocable living trust. And then you come to me and you say, Okay, now I want to do an asset protection plan, and I say, okay, take everything out of the revocable living trust, and let’s put it over here, because the revocable living trust is not an asset protection vehicle. So for me, it’s better to do asset protection first to design your asset protection structure, and then look at the estate planning and determine do I need still a revocable living trust that, you know, the for example, the bridge trust would pour down into? Do I need Children’s Trust? Do I need life insurance trust, you know, what kind of estate planning what you’re doing it from the position of I’ve already got my assets in this protected structure. So it much it works much better to see it as asset protection first, estate planning as the as the second step.

Chad Franzen 14:31

Can you explain to me a little bit about the concept of the pyramid of asset protection?

Douglass Lodmell 14:36

The pyramid of asset protection? Where does that come from?

Chad Franzen 14:39

I thought I noticed during my research, and I’m not that familiar with it, I thought you might be but uh, maybe that’s.

Douglass Lodmell 14:46

No, I mean, like somebody’s you know, kind of own structure, but it’s not something I’m familiar with.

Chad Franzen 14:53

Sure, sure. Hey, during your tenure or your kind of your lifespan with Lodmell & Lodmell, is there like a moment that you’re particularly proud of? Or that stands out to you?

Douglass Lodmell 15:05

Yeah, I love that. That’s a really good question. So, you know, I think all attorneys and all professionals, really, I think the first 10 years of your professional life, you’re really trying to get your feet under you, you’re trying to figure out, you know, who you are. And you’re also trying to develop the skill set that really allows you to, you know, see how you’re going to, you know, express your own creativity through it. So, so, thank God, I had a partner who was a father, who was able to mentor me through that. So I think that was easier to have somebody that really already had that experience and was was pulling me along. But I will say that, you know, somewhere around that 1011 12 year mark, it kind of clicked and I realized, wow, I really do understand this, I am really quite good at it. And the biggest skill that I have, is not drafting documents, you know, that’s, that’s one day, we want him to do that AI will do it for us. But the biggest skill is actually talking with clients and helping them understand the position that they’re in the risks that they’re dealing with, and, and emotionally helping them you’re coaching them through it. And so somewhere in there, I kind of realized I started seeing myself not as a drafting attorney that had this technically perfect thing. But as a coach and support network for my clients, such that they really were able to see me and come to me for for anything. And so, you know, certainly there was some big successes along the way where the plan worked, and the client was literally saved. And those were impactful. But I think that the moments leading up to those, the the, the many, many calls when they’re freaking out and feeling like, you know, is this really going to work? Those are even more important. And I can tell you today, you know, 26 years later, as as a I hate to say it, but you know, a senior attorney, you know, what he’s been around the block, I definitely see that as my role. I’m really a consultant and an advisor to my clients much more than a, you know, a technician that drafts legal documents.

Chad Franzen 17:24

Sure, sure. So speaking of advice, at what point would you say someone should start building their asset protection structure?

Douglass Lodmell 17:31

Well, since asset protection begins with really simple stuff, like an LLC, I would say, you know, as soon as you have your first assets you want to protect whether that’s a single family rental home or short term rental that you bought, even your primary residence, your first you know, $50,000 that you’ve saved, that’s already a good time to start. Because you don’t necessarily need to wait till you’ve got millions of dollars to say, Okay, well, you know, why I should do something. If you start now and you build, you’re going to build a better structure, you’re going to be building into that structure, I think you’re going to actually save more money and invest more money, because you’ve got like the piggy bank sitting on your kids dresser versus a change drawer. You know, there’s, there’s a, there’s a, there’s something that you actually feel like you’re building. So I would say right away, like almost immediately. Now now, when do they need kind of the full plan with the asset protection trust and you know, the holding company and all that, that usually begins around a couple million dollars of net worth that needs protecting? And that includes, you know, everything their real estate, their house, their cash, their stocks, everything?

Chad Franzen 18:37

Is a do it yourself approach advisable?

Douglass Lodmell 18:41

You know, to a point, I think it’s okay, I’m not, I’m not anti do it yourself. If if you can do enough research and realize, hey, I’m buying my first short term rental, it’s going to be $180,000, I’m putting $40,000 down, and you know, I’m money is tight, and I want to do something. And I’ve gotten enough advice to know that an LLC in the state where I’m buying the rental is probably a good first choice. And I can do that myself online for a couple 100 bucks, or I can hire an attorney for a couple 1000. And I need to save the money. I’m okay with that. I’m okay with doing it yourself. But there is a point at which you’re going to run out of the do it yourself capacity. And so you know, you just want to be aware because I do have people call me that they’ve done it themselves so long, that it’s difficult for them to pay for it or even take advice. So don’t let yourself get caught into it. I can do it forever.

Chad Franzen 19:34

I have one more question for you. But first, tell me how people can find out more about Lodmell & Lodmel.

Douglass Lodmell 19:38

Well, I mean, our website is great live no.com lots of resources on there. Or you can you can just email support@lodmell.com. Say, Hey, I heard Doug on the podcast and I’d love to talk to him. Is this podcasts mainly for attorneys, right? Yeah, yeah. Yeah. So I mean, you know, one of the things that I did about 10 years ago I was I started something called the Asset Protection Council. And that is a council that I invite attorneys to join. It provides education around asset protection and resources to help them add this to their practice. This is a practice area that is so good for so many different attorneys, especially estate planning attorneys, but business planning attorneys, any attorney that has the client profile that we just talked about you, it behooves you to be able to offer and speak about asset protection. Now, are you going to be ready to do it, and especially at that highest level for them, you know, right away, you really not. So it gives that it gives a resource so that we can co counsel on those cases. And so they can, they can start, you know, providing the services. So that’s assetprotectioncounsel.com. And I would strongly encourage you to go and check that out if you’re an attorney. And and then yeah, just email support@lodmell.com and say, Hey, I’d love to talk to Doug, about the Asset Protection Council and see if I’m a fit.

Chad Franzen 20:58

Okay, yeah, great. Perfect. Thank you. Hey, last question for you. You mentioned your father as a mentor for you. And you think, is there something maybe he’s told you a million times along the way or something he told he told you once that you’ll never forget? Like, what? what’s some advice that he’s given you that that really has helped you?

Douglass Lodmell 21:17

You know, that’s, that is a another great question. Um, I can tell you that the, the thing that he told me that I still use every single day of my life is that all things work to perfection. So when you are feeling like, it’s kind of not going your way, when I’m feeling like, it’s not going my way, I fall on that. And I say, Okay, well, there must be a reason for this. Because we all have challenges, professional challenges, personal challenges that they are there, they are part of the human experience. And having that fundamental belief structure, that it’s there’s a purpose for it, let me find it. Whether it’s true or not, is kind of irrelevant to me, because I know it’s helpful. And because it’s helpful, I continue to support that. And when things aren’t going my way, and I’m looking at it and saying these, this seems like it’s all bad here. I start looking for how it might be good. And just that exercise of looking, all of a sudden I see something, because a lot of times what’s happening is happening at 90 degrees to where you’re looking. And sometimes you the roadblock here is really just to get you to turn your head here and see what’s really there for you. So that was that’s been his greatest, greatest piece of advice and gift to me.

Chad Franzen 22:35

Great. Very nice. Hey, Doug, it’s been great to talk to you. Thanks so much for your time and all of your insights. Really appreciate it.

Douglass Lodmell 22:41

Yeah, my pleasure, Chad. Great talking.

Chad Franzen 22:43

So long, everybody.

Outro 22:46

Thanks for listening to 15 Minutes, be sure to subscribe and we’ll see you next time.