Safeguard Your Legacy with Offshore Asset Protection

What is an offshore asset protection trust?

An offshore asset protection trust is an effective tool for protecting assets from future lawsuits and potential creditors. A trust is established under the laws of a foreign country and managed by a professional trustee not subject to the jurisdiction of the settlor’s home country.

An offshore asset protection trust can provide peace of mind to people whose wealth makes them vulnerable to legal threats, such as physicians, business owners, and entrepreneurs.

In the United States, the cost of defending a lawsuit can quickly amount to hundreds of thousands or millions of dollars. In the event of a lawsuit, assets placed in an offshore asset protection trust will be extremely difficult to reach, even if the plaintiff gets a favorable judgment in a U.S. court. The most reputable offshore jurisdictions are the Cooks Islands, Nevis, and Belize, which have favorable laws and court systems for asset protection trusts.

Why set up an offshore trust?

Ultimately, the enemy of all wealth-builders is risk. Risk of legal threats multiply as the amount of wealth increases. Wealth can attract unwanted attention, and people can see success as a target. Offshore asset protection trust are a practical and effective strategy to protect assets.

Many high net-worth people have lost their fortunes to:

• Creditors
• Malpractice Claims
• Lawsuits
• Business disputes

A lawsuit can threaten someone’s entire net worth, but offshore trusts are a highly effective means to protect wealth and enjoy peace of mind during your lifetime.

If a lawsuit is filed against a settlor, in order to reach assets protected by an offshore trust the plaintiff would have to continue the lawsuit it in the jurisdiction where the trust is managed. Litigating a case in the Cook Islands or St. Kitts and Nevis is very different from filing suit in a U.S. court. The plaintiff would need to hire foreign counsel, pay a bond with the court, as well as face a legal system generally not sympathetic to plaintiffs.

How does it work?

In order to escape the reach of the U.S. court system, an individual can set up a trust and limited liability company established under the laws of a foreign jurisdiction. The trustee, trust protector, as well as the bank holding the deposits should be domiciled outside the United States. Generally, an offshore asset protection plan combines an offshore trust, offshore limited liability entities, as well as bank accounts, all housed in different jurisdictions.

In the event of a lawsuit, the person or institution serving as trustee can be changed.

Offshore Trust Jurisdiction

One of the most important things to consider when setting up an offshore trust is using the most favorable jurisdiction. A good jurisdiction means being able to take advantage of a favorable legal system with strong asset protection laws, while ideally paying no local income taxes.

Some of the most sought-after offshore jurisdictions are:

• The Cook Islands
• Nevis
• Belize

At Blake Harris Law, we will bring together a team of offshore Trustees, Trust Protectors, Bankers, and Financial Managers from around the world in order to provide the highest levels of offshore asset protection for our clients.

Cook Islands Trusts

Clients who are looking for the highest levels of offshore protection should consider the Cook Islands as a principal jurisdiction thanks to its unparalleled asset protection trust statues.

The Cook Islands International Trusts Act of 1989 firmly established this island nation as a pioneer in the offshore asset protection arena. Since then, asset protection trusts housed in the Cook Islands have become more common as decades of favorable caselaw have helped prove the high degree of protection offered by these trusts. Although in most jurisdictions, a trust is considered a private document, it is believed that the Cook Islands now has more registered asset protection trusts than any other country.

Types of Assets

An offshore asset protection trust can hold a variety of different assets:

• Cash
• Securities
• Cryptocurrency and other digital assets
• Limited liability companies
• Real estate
• Intellectual property
• Business inventory and equipment
• Recreational assets such as private jets, cars, and yachts

An Offshore Trustee

A key element of an offshore asset protection trust is ensuring the trust management has no ties or business presence in the U.S. Fortunately, there are many foreign fiduciary companies that operate with the same degree of integrity and professionalism as their U.S. counterparts. While not regulated by U.S. government bodies, offshore trustee companies are registered and regulated by the governments under which they operate. Many offshore fiduciaries have operated for decades and have served as trustees for thousands of clients around the world.

Blake Harris Law has connections with multiple established offshore trustee companies beyond the reach of the U.S. court system.

Taxes

A common misconception is that high-net-worth-individuals can avoid paying their income taxes by stashing their money offshore. Offshore trusts are not a means to avoid paying taxes or hiding assets from the tax authorities.