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When O.J. Simpson played for the Buffalo Bills, he received an interesting benefit in his compensation plan: a defined benefit retirement plan, which is similar to a 401(k) or IRA. For Simpson, the plan meant that upon retirement from the NFL, he would be paid approximately $25,000 a month for the rest of his life as a pension. Fifteen years later, on June 17, 1994, he was charged with committing a double murder. Although he was found criminally innocent of the crime in 1995, he later lost a civil judgment brought by the murder victims’ families. The jury in that case found that Simpson committed both “homicides willfully and wrongfully.” The families obtained a combined judgment against him in the amount of $33.5 million. At the date of the final civil judgment on appeal, Simpson’s retirement plan was reported by the court to be valued at $4.1 million and untouchable by the plaintiffs under federal law. Moreover, Simpson moved to Florida in 1999 and purchased a multimillion dollar home to avail himself of Florida’s unlimited homestead exemption, wherein creditors cannot touch an individual’s home or its equity. Although this was somewhat limited by the 2005 Bankruptcy Code Amendments, Florida still has one of the broadest homestead provisions in the United States. In 2006, Simpson began to pursue the publication of a book, If I Did It, and hoped to keep the profits from its sale. However, in July 2007, a federal bankruptcy judge awarded the rights to the book to the Goldman family. Although the family would ultimately receive 90 percent of the profits to help satisfy the civil suit judgment against Simpson, they were still prevented from going after his retirement plan. Then, in October 2008, Simpson was found guilty of entering a room in the Palace Station Hotel & Casino in Las Vegas along with a group of men and committing multiple felonies, including criminal conspiracy, kidnapping, assault, robbery, and use of a deadly weapon. Simpson received the harshest punishment and was sentenced to 33 years in prison, with the possibility of parole after about nine years.

The amazing fact: Throughout this entire saga, by relying on various federal and state exemptions, Simpson was able to protect his assets. This case is an extreme one, and I’d never suggest emulating a criminal like Simpson. However, it does provide an excellent example of how powerful retirement plans and the homestead exemption are as asset protection tools.

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