There’s no doubt that offshore asset protection is the most effective strategy for shielding your wealth from lawsuits and creditor claims. No other option is as airtight.
But even offshore asset protection comes with risks, which is why you must work with a reputable asset protection lawyer you trust to champion your best interests and set up your wealth in as ironclad a way as possible. A knowledgeable attorney will also have long-standing contacts overseas to act as local trustees to manage your wealth properly.
Once you transfer your wealth overseas into an asset protection trust, you legally give up ownership and control over those assets. This framework is actually what protects your fortune so well if you get sued. But the terms of your offshore trust and the people you choose to manage it are critical in preserving your financial wishes and goals.
Your wealth is deeply personal. The way you handle your assets determines your lifestyle and your legacy. Your asset protection plan should be just as personal – you don’t want to leave your fortune to cookie-cutter solutions. An experienced offshore asset protection attorney can help you set up your offshore trust exactly the way you envision, avoid unnecessary risks in the process, and set up your asset protection plan to be as robust as possible.
What Is Offshore Asset Protection?
You may have heard of offshore asset protection before, but possibly not on the best terms. In movies and TV, offshore trusts are often reserved for characters with bad – sometimes even criminal – intentions. But in reality, this is far from the truth. Offshore asset protection is a legal, legitimate, and durable strategy to protect your assets from liability.
The legitimate purpose of an offshore trust is not to skirt laws or avoid taxes. Offshore asset protection is the financial strategy of transferring your assets to a new legal entity (a trust) in another country, where they cannot be reached by plaintiffs or creditors.
Wherever you live or work, you’re exposed to liability. Courts in the U.S. and other countries are not shy about freezing or seizing assets in legal proceedings.
- A client or patient could sue you for professional malpractice.
- Your future ex-spouse may try to take more of your assets in your divorce.
- Aggressive creditors may try to seize or liquidate your assets to satisfy your debts.
- You may be named as a defendant in a civil lawsuit for injury or damages.
- A business dispute may threaten your personal assets.
If you get sued for any reason – personal or professional – a successful plaintiff could go after your assets to satisfy the judgment against you. Even if you have a corporate or business structure in place, this may not be enough to protect your personal assets from getting seized. Not if the court decides it can “pierce the corporate veil” in your case.
When you transfer your assets to an offshore asset protection trust, you sever your legal connection to your wealth. Instead, the offshore trust takes legal ownership and control over the assets. You designate yourself and/or your family as the beneficiary and appoint a local trustee to manage your assets according to the terms you set out in the Deed of Trust.
Giving up legal control of your assets to an offshore trust may feel like a leap of faith. However, the reality is you can still directly or indirectly control your assets once they are in an offshore trust when your trust is properly structured. That’s why it’s so important to find a legal professional who can make sure your trust will operate according to your wishes. A good asset protection attorney can help cater the process to your needs.
Which Type of Trust Is Best for Asset Protection?
In most cases, offshore asset protection trusts are the most protective trusts. However, it is extremely important to get the terms in the Deed of Trust and the structure of your trust correct from the beginning. In addition, you should use discretion in finding a trustee to carry out your wishes as desired – and a trust protector in case they need correction. Your attorney should be able to guide you to the best option based on your circumstances and goals.
What Country Is Best for Offshore Asset Protection?
Countries that specialize in offshore asset protection offer stable legal systems with exceptional privacy policies and defendant-friendly courts for your peace of mind. If a plaintiff or creditor tries to sue your trust to reach your assets, they will have to hire a lawyer local in the country where your trust is located and face a legal system that protects its offshore investors.
When many people think of offshore trusts, the Cayman Islands come to mind. However, that’s just one of many options – and is really the right fit for individuals seeking asset protection. There are other jurisdictions that offer even greater benefits.
- Belize allows you to establish an offshore trust with a “0 look back period.” This means that a creditor is not allowed to bring a claim against the trust on the basis that a transfer was a fraudulent conveyance.
- Offshore investors who choose the Cook Islands will benefit from the country’s favorable legal system and formidable asset protection laws. You can protect various types of assets, including liquid and tangible assets such as cash, stocks, and cryptocurrency.
- If creditors or plaintiffs want to go after your assets protected on the Caribbean island nation of St. Kitts and Nevis, they’re in for an uphill battle. The country does not accept foreign judgments (including from the United States) or freezing orders. In order to win a case against you, a plaintiff would have to meet an extremely high standard of proof.
Each of these countries also offers advantageous tax-neutral policies, where neither you nor your trust must pay local income tax, gift tax, inheritance tax, or estate tax on your assets. However, taxes in your home country would still apply.
The Importance of Finding a Reputable Asset Protection Attorney
With so much of your fortune at stake, you must be able to trust the judgment and expertise of the person helping you set up your asset protection plan.
Your asset protection attorney is possibly the most important person in this entire process. An experienced lawyer should be able to guide you and help you answer:
- Which country is the best option that offers the greatest protections for you?
- Which type of trust should you create in the jurisdiction of your choice?
- Who should you designate as a trustee to manage your assets?
- Should you appoint a trust protector and who should it be?
- How should you handle distributions from the trust?
- Should you take any other precautions or steps to protect your assets?
In order to successfully protect your assets, you must start sooner rather than later. If it turns out you tried to enact an asset protection strategy after you were already involved in a lawsuit, then it may compromise the protection you receive.
The last thing you want is to put together and execute an offshore protection plan only to realize after the fact that you missed something or left loose ends. Because asset protection trusts are so intricate, you must be absolutely sure that you’re getting the terms right. A good asset protection attorney is your insurance policy to ensure you make the right decisions.
What to Look for in an Offshore Asset Protection Lawyer
When speaking with an offshore asset protection lawyer, consider:
- How long have they been practicing in this area of law? How familiar are they with it? You want an attorney with a decent amount of experience under their belt.
- Does the lawyer have a solid network of reputable professionals who can act as local trustees and trust protectors for your trust? The more experienced the attorney in this area of law, the stronger their network of financial professionals is likely to be.
- Does the attorney actually focus their practice on asset protection or do they offer it as an add-on service along with their “main” practice areas? You’d be better off finding an attorney who’s dedicated themselves to asset protection because of the unique requirements and challenges of this area of international law.
At Blake Harris Law, we dedicate ourselves to protecting our clients’ assets, whether they choose to do so overseas or domestically. Whether you’re a U.S. citizen living on U.S. soil or a citizen of another country living across the world, our team can help. Contact us now to get started on your offshore asset protection plan.
