What is offshore asset protection, and why do you need it?
We usually only hear offshore bank accounts referenced in movies when a crooked businessman is convicted of laundering money into their Swedish bank accounts, but an offshore asset protection trust isn’t just for crooks and criminals; it is one of the strongest asset protection strategies in the world. An offshore asset protection trust relocates your entire asset portfolio out of the U.S. legal system and into an account in a foreign country governed by a completely different legal system.
Anything you own that has considerable value is an asset
This includes liquid assets, property, real estate, jewelry, art, boats, cars, and collectibles—all of which can be attacked by unsecured creditors and litigants at some point in your life. An offshore asset protection trust protects these assets. Your response to this statement might be, “I have no creditors and no claims against me, so I do not need offshore asset protection”, but it is never a bad thing to plan in advance. Creditors are not the only ones who can tap into your financial data – a vengeful coworker or an ex-spouse can easily get a clear picture of your financial information. Detailed records are kept by the federal government, state government, and local governments, as well as by the census office, credit bureaus, internet and insurance companies, health authorities, and more. You cannot stop creditors, private detectives, and litigants from accessing your tax returns, licenses and registrations, deeds, court documents, credit reports, medical history, and other financial records. It is in your best interest to examine all of the possibilities that could result in a future financial issue that could completely drain your bank account of your hard-earned wealth, leaving you and your family without a dime. Both your location and asset type will also impact the type of protection you need. For instance, Florida has 100% homestead protection, a legal regime to protect the value of the homes for primary residences. New Jersey, on the other hand, has 0% homestead insurance.
An offshore asset protection trust uses legal entities in favorable foreign jurisdictions to establish a foreign trust, and a trustee is assigned to the account. The trustee cannot be a United States citizen or a person that has a business presence in the United States. Why? Because foreign trustees have relationships with banks that help them to open accounts on behalf of their U.S. clients. It is extremely difficult for a United States citizen to open this type of account on their own, and U.S. attorneys do not have jurisdiction over foreign trustees, either. The strongest legal statutes are in the Cook Islands and Nevis.
Before being able to pursue a case in an offshore jurisdiction and its legal system, an attorney must post tens of thousands of dollars for a committee to review the case. The attorneys cannot work in a foreign jurisdiction, either, but must hire local representation. Most states have a four-year statute of limitations, meaning a creditor’s attorney can attack any asset transfers or conversions you made for up to four years after they have happened. As long as the applicable statute of limitations has not expired, you can be sued for events that took place many years ago – even if you are retired or no longer a part of a company. In some cases, your creditors can even seize assets that are held under the names of spouses and children as well as your retirement funds. Spouse and children assets can be deemed as fraudulent transfers if done within three years prior to the beginning of a lawsuit. Four years is a long time for your financial records to be under scrutiny. But, if these assets are moved offshore, an attorney only has a two-year statute of limitations, and proving fraudulent transfer in an offshore jurisdiction’s court beyond a reasonable doubt is quite the legal hurdle to overcome, especially if you can offer legitimate international investing. That’s why offshore asset protection works.
If you haven’t planned your offshore asset protection in advance and are in the midst of financial trouble, it is highly recommended that you take urgent measures of protection. Even when offshore asset protection is established late, it is one of the few asset protection strategies that work after a lawsuit is filed, offering 90 – 100% protection!