Asset protection planning often overlooks the value of claims or lawsuits the debtor has against creditors or other third parties. For example, I consulted with a client who owed another state a substantial income tax debt because a large tax shelter was disallowed by the IRS and subsequently the state revenue department. The client had liquidated most of his assets to pay the IRS, but he wanted to protect what he had left from the state. The client had several lawsuits pending against accounting firms, lawyers, and financial firms which issued opinion letters to the effect that the tax shelter was legally valid– which it was not. The state department, or any other civil creditor, could easily levy upon the client’s claims and lawsuits against the third parties who caused his tax liability. Most of any settlement would go to pay taxes. It is very difficult to protect causes of action, in part, because they are matters of public record once filed in a lawsuit. There is little market to sell or encumber a lawsuit whose outcome is uncertain. Any attempted assignment would not survive fraudulent conveyance allegations. Asset protection planning of potential causes of action is best done before litigation is begun.