What the Netflix Series Tiger King Can Teach You About Asset Protection Planning-Part 3
If you have seen the hit Netflix documentary Tiger King: Murder, Mayhem, and Madness, perhaps you can attest that it’s one of the most outlandish stories to come out in a year full of outlandish stories. With that said, while Tiger King’s sordid tale of big cats, murder-for-hire, polygamy, and a missing millionaire may seem too outrageous to have any relevance to your own life, the series actually sheds light on a number of critical estate planning issues that are pertinent for the general public.
Over seven episodes, Tiger King provides several shocking, real-life examples of how estate planning can go horribly wrong if it’s undertaken without trusted legal guidance. In this series of articles, we have been discussing some of the worst planning mistakes made by key people in the documentary while offering lessons for how such disasters could have been avoided with proper planning.
In part one and part two of this series, we focused on how the nightmarish ordeal Don Lewis’ daughters experienced following his death could have been entirely avoided if Don had worked with a lawyer to create his estate plan. Here in part three, we’re going to shift gears and explore the estate planning mistakes made by the self-proclaimed Tiger King himself, Joe Exotic.
The Tiger King gets dethroned
While the news that Carole forged Don’s will was a huge blow to Carole’s credibility and reputation, that very same week Carole achieved a major victory over her arch nemesis, Joe. Ironically, that victory also involved fraud, although this time Carole was the victim rather than the perpetrator.
On June 1, 2020, a federal judge awarded Carole ownership to all of Joe’s property, including his Oklahoma zoo, 16.4 acres of land, several cabins, and multiple vehicles. The ruling was part of a $1-million judgment resulting from a trademark infringement lawsuit Carole brought against Joe in 2013.
As we wrote about in part one, much of show, Tiger King, was devoted to covering the bitter public feud between Carole and Joe that eventually resulted in Joe being sentenced to 22 years in prison for hiring a hitman to kill Carole.
At some point during the feud, Joe created a company called Big Cat Rescue Entertainment (BCR Entertainment) for his travelling tiger cub-petting business in order to poach Carole’s potential customers. Joe even went so far as to create business cards for the new company that feature an imitation of the Big Cat Rescue logo, photos from the Big Cat Rescue website, and a Florida phone number to trick people into thinking BCR Entertainment was actually Carole’s sanctuary.
This led Carole to file a trademark infringement lawsuit against Joe, claiming he created the business cards to cause confusion between the two companies and steal her customers. The court ruled in Carole’s favor and a judge ordered Joe to pay Carole and Big Cat Rescue $953,000.
How not to protect your assets
Following the court’s ruling, Joe knew he stood to lose his zoo and everything else he owned to pay the judgment. Desperate to keep his business and prevent Carole from collecting any of his money, Joe attempted to shield his zoo by transferring title to the property to his mother, Shirley Schreibvogel, using a series of quit-claim deeds.
Upon discovering Joe’s attempt to thwart her, Carole filed a separate lawsuit against Joe’s mother for fraudulent transfer of property. Joe’s mother eventually admits under oath during a deposition that the zoo and land were transferred to her by Joe to remove it from the reach of creditors and Carole. Thus, the judge decided to rule that the property was fraudulently transferred by Joe to his mother. This judgment effectively reversed those fraudulent conveyances and thereby once again granting all of Joe’s property to Carole.
Although we certainly don’t condone Joe’s actions, he had every right to want to protect his zoo and other assets from being lost to a lawsuit. His methods, however, were entirely incorrect and enacted far too late. Had Joe used proactive planning strategies to properly shield his assets when he started his zoo, he most likely could have prevented Carole from seizing control of his business and at the same time avoided the need to commit the crime that sent him to prison.
This brings us to our third, and final, estate planning lesson for this series. This one will focus on asset protection.
Lesson three: To safeguard your family’s most valuable assets from legal and financial liability, consult with an experienced estate planning lawyer to put in place and maintain a comprehensive asset-protection plan—and do so well before you need it.
Now, we understand that most people would never find themselves facing anything remotely similar to Joe’s situation. However, just about everyone faces potential liability from far more common threats, making his dramatic scenario a great illustration of exactly why it’s so crucial to properly plan. Whether from a lawsuit, divorce, debt, or accident, the more successful you get the more risk there is that someone will want to take what you have.
Moreover, the popular belief that you can safeguard valuable assets such as a home or a business from creditors or lawsuits (or to qualify for government benefits like Medicaid to pay for long-term care needs) by simply signing over the title of these assets to another family member is completely mistaken. With what we just saw with Joe, transferring ownership in this way not only won’t effectively protect your assets but can also lead to a myriad of other legal complications for yourself and others.
There are a variety of different planning vehicles available for asset protection. For cases where you want to protect assets in this manner, the most airtight strategy involves the use of highly specialized irrevocable trusts. Such trusts are set up so that your most precious assets, including those you want to pass on to your children, are owned by the trust, not you. Since you can’t lose what you don’t own, those assets can’t be reached by creditors, lawsuits, or in a divorce.
For example, if Joe had instructed his mother to set up an irrevocable trust for him right from the start, and then either funded the trust with enough money to start his zoo from scratch or buy the zoo at some point after it was up and running, the trust would have owned the zoo, not Joe. In that case, Carol would never have been able to seize the zoo, even if she won a judgment against Joe.
Alternatively, if Joe didn’t have a parent or another loved one to set up the trust for him, he could have established an irrevocable trust for himself and then gifted his business and other assets into the trust. While this strategy isn’t as airtight as the first and requires the passage of years between the time of transfer and the time of protection, it can still be better than nothing, especially if you plan well in advance of any sort of an issue.
Like all estate planning, for your plan to be effective you must have your asset protection strategy in place well before something happens. If you try to protect your assets once a claim or lawsuit is even threatened, you could end up like Joe and find yourself not only losing your assets but also charged with fraud. That is why you need to get your planning started now, while there’s nothing to worry about and you still have every possible planning option available to safeguard your assets.
Planning lessons for the average Joe
Over the past three articles, we’ve observed that when undertaken without the support and advice of a trusted lawyer, estate planning and asset protection planning can go tragically wrong. Although the details of the Tiger King saga are about as abnormal as they come, the lessons presented here can show all of us how to prevent extremely common planning mistakes, making these lessons apply to practically everyone who seeks to put a plan in place.
Without proper guidance and understanding, you’re placing everything you’ve worked your whole life to build in serious jeopardy, all the while opening your family up to becoming mired in costly legal battles that can continue for even decades after you’re gone. Meet with us, as your Personal Family Lawyer®, to ensure your estate plan works exactly as intended and your family stays out of court and conflict, no matter what.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
Photo by Waldemar Brandt from Pexels
