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What is cryptocurrency asset protection?
Cryptocurrency has recently become a financial asset that investors are gaining high returns from. Since cryptocurrency continues to increase in value, it is important to protect and understand the ways you can protect these types of digital assets. A few of these protections include offshore trusts, domestic trusts, and a Titanium Trust. These protections can be discussed when drafting an asset protection plan with proper assistance from law firms such as Blake Harris Law. It is important to understand the different ways each of these protections work and what the benefits to each protection are.
Why do I need legal guidance to protect my cryptocurrency?
The IRS has deemed cryptocurrency a taxable asset, it can be classified as property. As property, this means it can be a target of legal action, resulting in the loss of cryptocurrency assets—which can be in the hundreds of thousands and millions in digital currency. Protecting your crypto assets will become vital in ensuring that if at any point your assets become the target of legal action, it will have extra layers of security and present a greater challenge for any persons or entities who try to seize them
Cryptocurrency Asset Protection Options
Because cryptocurrency has now become a viable financial asset, it is important to understand the different ways it can be protected. A few of these protections include offshore asset protection trusts, domestic asset protection trusts, and a Titanium Trust. These protections can be discussed when drafting an Asset Protection Plan with proper assistance from Blake Harris Law.
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.
A Blake Harris Law, we utilize offshore asset protection trusts through the Cook Islands, a small country in the South Pacific. Placing these assets in a trust not only protects them from creditors, but also protects them from lawsuits that you could face. A few of the reasons Blake Harris Law utilizes Cook Island Trusts is:
- The Cook Islands legal system is based on English common law with legal institutions of a first world nation
- The Cook Islands do not charge taxes on assets held under a trust
- There is a two-year statute of limitations on all creditors that bring an action against you or the trust
- A Cook Islands Trust can protect assets that aren’t located within the islands and you can transact with them electronically
The Cook Islands do not recognize foreign judgments and as such an American claimant will have to file a case of fraudulent transfer in the Cook Islands if they want to receive any assets from the trust.
A Cook Islands Trust is one of the safest offshore asset protection solutions. A key element of an offshore asset protection trust is ensuring that the trust management has no ties or business presence in the U.S. While not regulated by U.S. government bodies, offshore trustee companies are registered and regulated by the governments under which they operate.
Domestic Asset Protection Trust
A domestic asset protection trust (DAPT) is a legal structure that allows you to protect your assets from legal threats. In essence, a DAPT is an irrevocable trust in which the beneficiary can be the same person who created the trust, and the trust’s assets are shielded from that individual’s creditors.
Due to the simplicity and flexibility of a DAPT, it has become an increasingly popular option for asset protection. While business owners have traditionally been able to protect themselves by using limited liability companies or corporate entities, a DAPT allows individuals to protect their personal assets, as well as any business or investment assets. This type of trust can help level the playing field when it comes to personal exposure to creditors and lawsuits.
It is not just traditional creditors that a DAPT can protect you from. DAPTs also provide protection from legal complaints, malpractice claims, and a host of other financially consequential events.
A DAPT can allow you to shield yourself from the implications of lawsuits. Not only will this help you protect your financial health if legal action is brought against you, but it can also help you deter lawsuits from being filed in the first place. A creditor might be less likely to seek money from you if they know you have legal protections in place.
The Titanium Trust is a proprietary asset protection trust, which takes a traditional domestic asset protection trust and offshore trust one step further. Like titanium metal—strong and lightweight—the Titanium Trust has bulletproof strength. It protects your assets in the United States, but it also has the added advantage of agility, allowing you to move your assets through a network of international trust companies, protectors, and bankers who work together to safeguard your assets.
For years we have offered offshore trust solutions that provide the highest levels of legal protection. Our team of attorneys have created an asset protection trust that provides the strongest level of legal protection while avoiding the ongoing costs and compliance requirements of an offshore asset protection trust. The Titanium Trust combines domestic and international elements to provide exceptional flexibility and protection.