Late one night, I found myself deep into the new O.J. Simpson documentary on Netflix. If you haven’t seen it yet, I highly recommend pausing reading these articles and returning after you finish. The last thing I want to do is spoil the series for you – it is an intriguing story with new information that could only be shared after Simpson’s passing. Let’s agree that you’ve been adequately warned.
It brought back memories of a trial that was impossible to ignore. If you were around in the 90s, you remember it vividly. The riots. The media frenzy. The stoic face of Judge Ito. The slow-speed Bronco chase. The infamous glove demonstration, where Johnnie Cochran uttered the now “legendary” words:
“If the glove does NOT fit… you must acquit.”
It was a defining moment in American history. But what many people don’t talk about is what happened after Simpson walked free from criminal charges. I even remember having a TV in the classroom to follow along as the verdict was announced… a TV in the classroom in those days were not the norm. Dang, I guess I’m getting old.
After the acquittal, the families of Ron Goldman and Nicole Brown took him to civil court… and won. A jury awarded them $33 million in damages. Yet, they never saw a dime.
Why, you may ask? Well, it’s not as surprising as it may seem on the surface. Simpson (or, more likely, his legal and tax strategists) had structured his wealth in such a way that creditors couldn’t touch it.
This article is Part 1 in a three-part series that will break down and explain exactly how this was possible. Before we put all of this together and can understand how this cohesive asset protection strategy worked (for Simpson at least) – we need to examine each piece individually to understand the full picture.
We’ll begin with the first and arguably one of the most powerful tools Simpson used: TRUSTS.
Before we dive in, a quick disclaimer: I am not a lawyer. This article is for informational purposes only. Before implementing any asset protection strategies, consult a qualified attorney and tax strategist.
What Is a Trust, and Why Does It Matter?
Many people think trusts are only for the ultra-wealthy, but they’re one of the most powerful tools available to anyone who wants to protect their assets. At its core, a trust is a legal arrangement where one party (the trustee) holds and manages assets on behalf of another (the beneficiary).
The trust may seem like a complicated thing… so I want to spend some extra time here to make sure I do not lose any of you along the way. Fair enough?
At its core, a trust is simply a legal arrangement where a grantor (or settlor) transfers assets to a trustee, who manages them for the benefit of a beneficiary. The trustee has a fiduciary duty to act in the beneficiary’s best interests according to the terms set in the trust agreement. The trust agreement is a legal document that outlines how, what, when, and by whom the trust should operate and handle its business.
Maybe an image can make this clearer?
Imagine Christine, a successful business owner… who wants to ensure her wealth is preserved for her children while avoiding probate. She creates a revocable living trust, naming herself as the trustee and her two children as the beneficiaries.
It’s important to stress that Christine maintains control over the assets placed inside the trust as long as she’s alive. Upon her death, the successor trustee (her brother, in this case) takes over and distributes assets according to her wishes (all outlined in the trust documentation, or will), avoiding lengthy probate proceedings in court involving lawyers and thousands of dollars in expenses.
The Trustee can be the grantor (in revocable trusts), a trusted family member, a friend, a lawyer, or even a professional corporate trustee (like a bank or trust company). The Beneficiary can be an individual (such as children, spouses, or family members), a charity, or even another business entity.
OK – there is a lot of jargon, mumbo-jumbo stuff going on here (which I usually promise to remove, but in cases like this, it’s necessary to include and explain)… but hopefully, this gives you an initial idea of what a trust is, how it works, and its individual parts. I’m sure it will all fall into place as we move along.
The Hidden Power of Trusts
What makes trusts so powerful? One of the biggest advantages is that they strip your personal name from official ownership records. Instead of, for example, Sam Smith owning an asset outright, it’s now held by ABC Trust… a trust that Sam created, manages, and controls.
Why does this matter? Because when assets are no longer tied to your personal name, they become significantly harder for creditors to seize. This was a game-changer for O.J. Simpson. Had he kept millions in his personal bank account (read: personal name), the Goldman and Brown families could have wiped him out after winning their civil lawsuit. Instead, his assets were shielded – legally out of reach.
Who Owns an Asset Placed in a Trust?
Here’s where it gets interesting. The moment you place an asset into a trust, you technically no longer own it…the trust does. On the surface, that might sound like a contradiction of what we just discussed.
But here’s the key: You own and control the trust. The trust owns the asset, and you control the trust. See where this is going? I’ll break this down further in a bit… but for now, let’s keep going.
This distinction of asset ownership makes it significantly harder for creditors to enforce claims against those assets, especially IF the trust is set up in a state with Charging Order Protection Entity (COPE) laws.
In O.J. Simpson’s case, his trust was set up in Nevada, one of the most favorable states for asset protection. Nevada’s COPE laws prevent creditors from seizing trust assets outright, limiting their recourse to a “charging order,” which only entitles them to distributions if and when the trustee decides to make them. This legal barrier made it nearly impossible for the Goldman and Brown families to collect their civil judgment.
COPE’s are extremely important to this story. But, unfortunately they are an entire subject of their own – so I’ve written an article about them to dig even deeper. If you truly want to “nerd-out” about COPE’s… you can read all about them HERE.
If you want the quick and dirty about COPE’s… beyond shielding assets from creditors, COPE laws also provide significant privacy benefits, making it difficult for outsiders to determine who actually owns the assets within a trust or entity.
In states with strong COPE protections, public records do not disclose ownership details, adding an extra layer of security, and privacy, for high-net-worth individuals and business owners alike.
Types of Trusts: Which One Protects You?
Not all trusts are created equal. Some offer privacy but no real protection… others are built like vaults. Here’s how they compare:
Revocable vs. Irrevocable Trusts
The main types of trusts that most people will need to understand are:
- Revocable Trust: You still control the assets and can change the terms at any time. However, since the assets technically belong to you, they aren’t protected from lawsuits or creditors. Hence, why it’s important to add layers of difficulty (protection) for creditors.
- Irrevocable Trust: Once you place assets inside, you no longer own them… which means creditors and lawsuits can’t reach them. This is one of the strongest legal barriers you can create. The downside to this structure is the terms and conditions of the trust cannot be modified.
Domestic vs. Offshore Trusts
As we saw in OJ’s case, where your trust is domiciled has a major impact on its ability to withstand claims from a potential lawsuit. The two most prominent types of trusts used are:
- Domestic Trusts: These are set up in the U.S., subject to U.S. laws. Some states (like Nevada and South Dakota) have stronger protections than others.
- Offshore Trusts: These are placed in countries with ironclad asset protection laws (such as the Cook Islands). Even if you lose a lawsuit in the U.S., courts struggle to access offshore trusts.
Asset Protection Trusts (APTs)
These types of trusts are specifically designed to shield wealth from creditors. States like Nevada and Delaware allow domestic APTs that can legally block creditors from seizing your assets.
O.J. Simpson likely used a combination of different types of trusts and entities to shield his assets. By doing so, he ensured that his wealth remained largely untouchable even after losing in civil court.
Avoiding Probate: The Hidden Bonus of Trusts
One of the biggest, but often most overlooked, advantages of a trust is that it helps your family skip probate. When someone passes away without a trust, their assets get tangled up in the court system before being distributed… a process that can take months, or even years, to settle. A trust ensures that assets pass directly to heirs without court interference, saving time, money, and unnecessary stress.
The probate threshold varies by state and can change at any time, so it’s worth keeping an eye on. For example:
- Florida: Estates worth $75,000 or more must go through probate.
- New Jersey: The probate limit is $50,000 for surviving spouses and $20,000 for heirs without a spouse or partner.
- Illinois: Probate kicks in for estates over $100,000, especially if real estate is involved.
The real kicker? Probate fees typically eat up 4-8% of the estate’s value – most of it going to lawyer fees, court costs, and administrative expenses. If your estate leaves $500k to your heirs… which in today’s economy is not uncommon (especially with Real Estate prices having skyrocketed). Roughly $30k will be spent in fees just to distribute what’s left. That’s money that should stay in your family’s hands, not disappear into the legal system. And it is so easy to prevent.
For business owners, skipping probate isn’t just about inheritance… it’s about keeping the company running smoothly. Imagine if something happened to you tomorrow. Would your family or business partners be stuck in legal limbo, waiting for the courts to sort everything out?
A trust eliminates that risk. It ensures business continuity and gives you peace of mind knowing your affairs are in order.
Take Action Before It’s Too Late
The biggest mistake people make? They wait, thinking I’ll get around to it. The sad part is, it generally never gets done. Setting up a trust now means you lock in protection and never have to think about it again.
At Weston Tax Associates, we can help you set up a trust that fits your needs. Spend a few thousand now, enjoy the benefits, and sleep well knowing your wealth, legacy, family, business, and interests are protected. If you’re ready to take the next step, reach out… we’ll guide you through the process, start to finish.
Wrapping It Up
Most people assume that lawsuits and creditors only happen to the rich and famous… until they get sued. Business owners, landlords, doctors, and anyone with significant assets are prime targets. If you don’t have a plan, your wealth is wide open to attack. We live in the most litigious time period ever recorded. I, for one, do not see that trend slowing down anytime soon.
Of course, O.J. Simpson’s case is an extreme example, and not everyone needs the kind of legal fortress he built. But here’s the truth: everyone in America should have a trust. His story isn’t just a headline; it’s a lesson in how to protect what you’ve built and secure your family’s future.
Think about it… the last thing your family should have to deal with when you’re gone is a lengthy, expensive probate process. Be Pro-Active. Set up a trust now. Your future self, and your family, will thank you.
This is just the first layer. In the next article, we’ll explore how retirement accounts played a crucial role in keeping Simpson’s money safe, and how you can do the same.
Welcome to the New Age of Accounting. Let’s begin.
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
