O.J. Simpson has done more to promote asset protection planning than all the promoters put together. Was his planning intentional or did he simply get lucky?
Of the approximately $30 million judgment that the Goldmans received, they collected a small percentage. They foreclosed on Simpson’s Brentwood mansion and sold some of his memorabilia. Why are they unable to seize anything else?
According to many sources, Simpson has millions of dollars in various retirement plans, a Florida home with significant equity, bank accounts and possibly other undiscovered assets. Neither the Goldmans nor the Browns have been able to reach these assets.
Simpson’s retirement plans are qualified under ERISA (Employee Retirement Income Security Act of 1974). ERISA, which is a federal statute, provides that only the plan participant can reach the money in the plan. Creditors cannot, under any circumstances. While some have argued that maybe the Internal Revenue Service can invade these plans, that is not a well settled issue.
Once funds are distributed from the plans, ERISA protection no longer applies. However, the funds continue to be protected under Florida law (and would be similarly protected in most other states) if they are kept in a segregated account. Simpson receives a distribution from a plan, deposits it in a bank account and so long as no other money is deposited into that account, the funds are not reachable. He can then use the funds in the account to pay his personal expenses.
Florida also provides protection for the equity in the residence. Florida law simply exempts equity in a primary residence from claims of creditors. No dollar limitation is placed on the amount of equity protected.
Some have speculated that Simpson may have offshore accounts, but these are just unsubstantiated rumors. Even if Simpson had assets offshore, by now these assets would have been transferred into special structures that would make the assets unreachable, even if they were discovered.
It is difficult to determine how much of this was planned and how much was luck. He certainly did not plan for years by contributing money to ERISA-qualified retirement plans. But moving to Florida, was it warm climate or friendly asset protection laws? We’ll have to keep guessing.
Mr. Stein is a partner with the law firm Boldra, Klueger and Stein, LLP, in Los Angeles, California. The firm's practice is limited to asset protection, domestic and international tax planning, and structuring complex business transactions. The firm's goal is to provide the highest quality legal work that is usually associated with only the biggest law firms, in a boutique firm setting.
Jacob received his law degree from the University of Southern California, and his Master's of Law in Taxation from Georgetown University. Mr. Stein has been accredited by the State Bar of California as a Certified Tax Law Specialist and is AV-rated (highest possible rating) by Martindale-Hubbell.