O.J. Simpson's financial planners provide lesson in 'asset protection.'

The next O.J. Simpson court battle - O.J.3 - will be over whether the Browns and the Goldmans can collect any of the money they're owed. Even if the damages are reduced, O.J.'s assets appear to be pretty well squirreled away.

On the evidence, he has had wise financial counsel for many years. Choices he made to secure his future, such as building a large pension fund, are keeping him safely away from his creditors today. Other asset-protection decisions may put his remaining money beyond the reach of the civil courts.

The moves that O.J. are known to have made are entirely legal. But they shine a spotlight on an industry that also has a smudgy side.

A lot of wealthy people don't want to pay their debts. Fearing trouble, they spirit their money into trusts, often out of the country, never to be seen again. Or they lock it in family limited partnerships that creditors can't crack.

There are some defensible uses of asset-protection plans. A meticulous doctor, for example, might worry that one disputed decision could bury her, unfairly, under a catastrophic malpractice suit. An entrepreneur might be shocked by a frivolous lawsuit filed against a friend.

To protect themselves, they stash their money in hidey-holes, sometimes in countries that don't enforce judgments awarded by U.S. or other foreign courts. For this secret service, clients pay lawyers $15,000 to $30,000 a pop plus $2,000 to $7,000 a year in maintenance fees.

But let's face it: Many asset-protectors are playing a dirtier game. They're laundering money, evading taxes, hiding assets in divorces, cheating business partners, or ducking out on legitimate debts. Initiates whisper knowingly about the Cook Islands, Cayman, Liechtenstein, Gibraltar, Belize, Costa Rica, Guernsey, Vanuatu, and Turks and Caicos (look 'em up).

There are many different ways of ducking creditors. One popular choice is a family limited partnership, which acquires your business or investments. Typically, you retain a small interest - just 1 percent or 2 percent. The rest of the ownership rights are transferred to limited partners - say, your children. But you're the general partner so you keep control.

Used this way, partnerships are a legitimate way of saving income and estate taxes, while passing assets to your heirs.

But they're also debt-evasion schemes. After winning a judgment against you in court, a creditor might be able to seize a partnership interest. But nothing compels you to distribute any partnership money. So all the creditor really holds is the doughnut's hole.

Some lawyers think family trusts can be cracked - especially when structured in ways more aggressive than I've described. If they're obvious tax dodges, or sham redouts against honest debts, some judge, somewhere, may say "enough."

The real paranoids (or debt dodgers) buy foreign trusts. Your assets don't have to leave the country. But because of the way the trusts are set up, they probably cannot be reached by U.S. courts.

Foreign trusts are taxable, but many owners try to duck that obligation, too.

There are many simpler ways of dodging creditors, however. For example, take O.J.'s $4.1 million pension fund. It's unreachable by lawyers but he can add to it, borrow against it, and use it in retirement at will, says Chicago bankruptcy attorney Keith Shapiro of Holleb & Coff.

In this respect, O.J. lucked out. Some states - but not California - allow creditors to seize pension-fund withdrawals that exceed what you need for basic living expenses.

Some states protect married couples by letting them own real estate as "tenants by the entirety." That prevents one spouse's creditors from selling the house, in order to satisfy a judgment against the other.

Where that's not an option, people vulnerable to lawsuits - doctors, for example - often move assets into their spouse's name (no spouse, in O.J.'s case). Cash-value life insurance may also be exempt from seizure.

Bankruptcy normally isn't considered an asset-protection strategy. But it can be in states like Texas and Florida that let bankrupts keep enormously valuable homes. Florida has another attraction. If you're a family head, your wages cannot be garnished for debt, Shapiro says.

If O.J. went bankrupt under Chapter 11, he'd retain control over how his finances were rearranged. He has borrowed against his major assets - house, car, artwork - using them as security. So even if the assets were sold, unsecured creditors like the Goldmans and Browns probably wouldn't get a dime.

People subject to lawsuits complain that American juries award judgments far in excess of the damage done. But creditors have a different view. They say that shrewd debtors duck their obligations much more often than people think.

Checking credit references

When you apply for a job, you expect the company to check your references. But do you also expect it to pull your credit report?

Tens of thousands of employers take a peek at this slice of your personal life: Do you have big debts, do you pay bills on time, have you ever been sued by a creditor, is there a tax lien on your home or a bankruptcy in your past?

Employers use these reports "to serve as a general indicator of an applicant's financial honesty and personal integrity," says Experian (formerly TRW), one of the three major credit bureaus.

Hmmmmm. If a reporter went bankrupt four years ago, does that mean she won't cover her stories well? If a nurse runs late on her credit card payments, will she forget how to administer shots?

Not one person I spoke with had any evidence to prove that good credit reports predict good job performance. Regarding employees who handle money, Experian's Marty Dee calls it "more of an intuitive situation, where if someone has a huge amount of debt, they might be susceptible to bribery or theft."

Of course, there's always the risk that your credit report might contain an error - maybe listing a bankruptcy for someone with a name similar to yours.

Clearly, any job hunter should check his or her credit report for accuracy.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.