Offshore Asset Protection Trusts

Clients who wish to achieve the greatest protection and flexibility generally will prefer to use what is known as an Asset Protection Trust. This is a trust which is created under the laws of a foreign jurisdiction in order to achieve certain advantages which cannot be accomplished with a domestic trust. We have created our program in response to the massive escalation of risk factors that adversely affect the preservation of wealth, and in recognition of the opportunities provided by the global investment markets and the availability of protective legislation offshore.

The Offshore Advantage

A properly structured offshore wealth protection trust will provide a greater degree of protection than a wholly domestic-based plan. The principal attraction of an offshore trust is the legislative advantage provided by those offshore jurisdictions that have introduced trust legislation specifically to facilitate the protection of wealth. This legislation will include provisions for:

* the protection of spendthrift beneficiaries; the avoidance of forced heirship rules;
* the avoidance of the rule against perpetuities and restrictions on accumulations;
* non-enforcement of foreign judgments;
* specific rules to determine whether transfers of property are void or voidable against the settlor or the trust;
* legislation that provides greater flexibility for estate planning purposes allowing the orderly distribution of wealth to families or charities;
* use as an effective premarital planning vehicle either in substitution for or as complementary to, prenuptial agreements;
* a greater degree of privacy and confidentiality than is available domestically;
* diversification of client investment portfolios as the more established offshore finance centers provide direct access to specialized international or regional investment management facilities.

In using the Asset Protection Trust the individual does not need to sacrifice any degree of immediate control and access to his property. The client can be beneficiary as well as a trustee of the trust and can thereby maintain continued access to and enjoyment of his property. If at any point there is an attack upon this structure by a creditor, the liquid assets and personal property can be shifted to offshore account that has been established in the name of the trust. This feature provides the ultimate protection for family assets since this account will not be subject to the jurisdiction of a U.S. court. Once assets have been safely relocated outside the U.S. and under the protection of the laws of that country, recovery of the funds by the creditor becomes impractical, if not impossible. Real estate or other nonliquid assets can be protected through an arrangement known as the Equity Reduction Plan. In a properly established trust of this type, even when liquid assets are moved into the offshore account, the client does not sacrifice any practical degree of control or authority. The tax rules governing these kind of trusts are identical to those concerning the domestic trust. For both income tax and estate tax law, the Asset Protection Trust is ignored by the IRS. Properly structured, there are no gift tax consequences to the arrangement and all income of the trust is reported directly on the return of the settler. Summary Asset protection is an essential component of any prudent financial plan. In today’s dangerous business climate, a lifetime of successful accomplishments can be obliterated by a single unexpected lawsuit. The objective of asset protection is to insure a level of certainty and security as one makes his way through the hazards of everyday life.

FOR MORE INFORMATION PLEASE CONTACT

ASSET PROTECTION, INC.

949-375-4662