Asset Protection Strategies
The principle in developing an asset protection strategy is to determine what level of risk you face, the assets and nature of property you are protecting and the level of control that you are comfortable with. We offer recommendations from avoiding probate, to business liability, all the way to bulletproof requirements.
A good asset protection strategy should act as a discouraging agent for a legal opponent who is considering pursuing you, and secondly prevent your personal assets from being seized after a lawsuit is over. This is done through legal procedures according to the US and, if offshore, foreign jurisdiction statutes.
Paul and Karen were in trouble. An employee had borrowed their company truck without permission. The employee had hired a day laborer and proceeded to trim trees for a client "on the side." The day laborer cut his arm and sued Paul and Karen. They had about $75,000 to protect. So, we established a limited liability company in the Caribbean island of Nevis. We established a bank account in a strong, safe bank in the region. When an asset search was completed, the opponents found very little. They settled out of court for minor medical costs only.
We recommend a variety of strategies that offer increasing levels of financial privacy and protection. Each strategy has its pros and cons and these should be weighed during a consultation with your professional. In most cases to get directly to maximum financial privacy an offshore strategy is a strong first step. In all of these variants, the first principle of protection is addressed and backed by some of the strongest legal statutes available. What you are doing is creating a separate legal person to hold title to your valuable assets that is completely private and would be nearly impossible to locate and even more difficult to prove, using offshore strategies.
In all of our privacy recommendations we include a bank account which is in the name of your new legal entity. Now you have doubled the privacy. You are the only individual who has access, signatory authority and rights to your bank account, but you open it in the name of your private legal entity. At this point you can have your offshore entity own, control, manage many types of structures and increasing levels of protection mean that you increase the types of structures within the strategy, which include trusts, other companies, domestic management corporations, etc. The details should be worked out with a professional so that your unique scenario is managed properly.
Another reason why offshore strategies are recommended is that using domestic legal entities for asset protection means that you will have to comply with state-regulated operating formalities. For corporations, you will have to maintain a registered agent, keep annual meeting minutes of the shareholders, prepare and file an annual statement of information and file taxes. Offshore entities in most jurisdictions require a registered agent but are very flexible in terms of annual meeting requirements.
Conversely, there are a number of states, Nevada in particular, that extend excellent privacy protection and the option of issuing bearer shares, that when established properly using nominee officers, immediately give you a high level of privacy and protection. This must be structured properly and set up by a professional for the specific purpose of financial privacy as an asset protection strategy. You may want to order the nominee officer and director service so that your name does not appear in the public records. For additional privacy and legitimacy you may want the Nevada office program which includes a phone number answered during business hours, "Thank you for calling our corporate offices, how may I help you?" We pass the messages on to you, receive faxes and forward mail.
Guidance
Asset protection strategies are not put into place to hide property from your government, avoiding taxation or illegally eluding creditors. We always recommend solid and lawful strategies to protect your personal assets through leveraging the legal statutes of multiple governments. If at anytime during planning, you are told that you won't have to pay taxes on gains through a strategy, then that is definitely a time to question the source. People in the US, Canada and the UK are taxed on a worldwide income. Reporting requirements are in the hands of the taxpayer. It is important to properly report your taxable income. The legitimacy of your protection could be jeopardized if there is improper or illusive reporting, which will effect its protection should you need it.
When you are forming your strategy, you should be educated on all of your options and be presented with court cases where the recommended strategies worked, and why. As well as success stories, you should make yourself aware of some failures with improperly structured strategies. US LLCs are usually the tools used to protect real estate. A land trust protects the privacy of ownership for your home. Offshore companies and trusts tend to be strongest for protecting liquid assets. In all of these cases what is right for you may not be right for the next person, which is why we require that all of our strategies be explored through our professionals with your entire asset and risk profile analyzed to flesh out your strongest options.
We urge all of our clients to perform a considerable amount of research and understand the complicated issues around asset protection strategies. Our consultants will sit down with you to answer all of your questions and discuss the many ways you can protect yourself. There is always a circumstance where a strategy failed in court and it is critical that you understand why and read case history to know what deciding factors were in that particular case. It's the same with domestic business structures when a court ruling declared that the corporate veil be pierced and a business owner is held personally liable for business transactions. Each case is different and a court's ruling depends on the details of the case. Sometimes it's a matter of formalities, other times it is how the officers ran the corporation and managed funds. An attorney's job is to attack the structure of your liability shield and find a weakness to penetrate it to get to you and your assets. When these structures are put into place by professionals with legal backgrounds, who already know what the attorneys are looking for and can reinforce these areas and help you maintain the highest level of protection these business structures can offer.
Creating an asset protection strategy should be done with all things considered and performed by a reputable and experienced asset protection service that can provide you with all of the information to make a confident decision.
One of the most important factors in an asset protection strategy is timing. If you remove your name from your personal assets while in litigation, there may be complications. There are some methods that can be performed, however the process is more challenging and an expert, such as Asset Protection Planners, Inc, should be sought in order to develop a solid plan in the given scenario.
This website section offers recommended solutions to common liability and risk scenarios. These are all packaged for you and cover the pros and cons of each. It is important that you consult with a professional before purchasing any asset protection strategy. We offer strategies in person or over the phone through by our trained and qualified consultants.