Are asset protection plans unethical or illegal?

No. The law provides that residents of California, as well as residents of other states, can hold property titled in many different forms. The law also allows spouses to transfer property between themselves, so long as they follow certain well defined procedures and methods. Holding property titled in one way, as opposed to another, has certain advantages when it comes to asset protection. Agreements to help protect your assets from creditor claims are just taking advantage of the legal rights available to individuals to hold title to property as they chose.