As advisors, we are often asked to recommend a variety of asset protection strategies to insulate clients from losing wealth to predatory lawsuits. But how would you handle a wealthy business owner who, while highly intoxicated, ran a stop sign, fatally struck someone, and later legally adopted his adult girlfriend in an effort to keep the victim’s family from collecting damages? While this maneuver might challenge your personal ethics, such a strategy appears entirely legal — at least for now.
Twice the Legal Limit
This exact scenario is playing out in a Florida wrongful death suit. Business owner John Goodman (not the actor), 48, reportedly had a blood-alcohol level of more than twice the legal limit several hours after causing a fatal crash in February 2010. Police said Goodman ran a stop sign and hit Scott Patrick Wilson, 23. (http://tinyurl.com/7nbvdf8). Prior to the crash, Goodman had created a Trust for his two minor children, for which a judge ruled that the contents could not be considered part of his financial worth if Wilson’s family were awarded damages. Not long after the crash, Goodman adopted his 42- year-old girlfriend, naming her as another beneficiary of the Trust. Some see this as a shady way to shield assets from the victim’s family while keeping control of the money for himself. Goodman faces serious criminal charges and up to 30 years in prison. A civil trial date has been set for March 27 in the wrongful death suit.
Validity of Adoption Questioned
It remains unclear if Goodman’s adult adoption will be upheld by a probate court with jurisdiction over the children’s Trust, or if it will be declared a sham. For now, the trial judge in the wrongful death suit has said that he must treat the adoption as if it were valid.The attorney for Wilson’s family is calling foul on the adoption. “As a result of adopting his 42-year-old adult girlfriend, John Goodman has effectively taken over one-third of the Trust assets,” Attorney Scott Smith told FoxNews.com. “It should not go unrecognized that he has adopted his adult girlfriend as opposed to adopting a child in need. That cannot go unrecognized.” While Goodman’s tactics might seem distasteful to some, what he’s done doesn’t appear to fall outside the law. More importantly, it appears to be working.