Are you looking for a way to protect your assets from creditors, lawsuits, and other threats? An offshore trust could be exactly what you need.
When established properly, an offshore asset protection trust makes it nearly impossible for creditors to obtain your assets. However, you need an experienced asset protection professional to set one up the right way. That’s exactly what you’ll find at Asset Protection Planners! Our management has been setting up offshore trusts since 1996. More importantly, we know how to build a trust capable of safeguarding your assets from threats.
Learn more about our offshore asset protection trust services and how they protect your money:
- Our Offshore Asset Protection Trust Services
- Offshore Asset Protection Trust Overview and Key Parties
- Offshore Trust Jurisdictions
- How We Recommend Setting Up an Offshore Trust + LLC
- Advantages and Disadvantages of Offshore Asset Protection Trusts
Our Offshore Asset Protection Trust Services
A lot goes into setting up an effective asset protection trust. The strongest trusts include everything from offshore bank accounts and overseas trustee companies to offshore business entities. To ensure your trust can adequately protect your assets, we provide the following services:
Offshore Limited Liability Company (LLC) and Other Business Entities Setup
Creating an offshore LLC is a common way to enhance your asset protection trust. An LLC already comes with built-in asset protection benefits, like separating your assets from those held by the company.
We often help our clients set up offshore LLCs within their offshore asset protection trusts. Doing this allows them to retain greater control of the trust assets and prevents creditors from claiming assets within the LLC. When someone sues the settlor or a creditor pursues them, the trustee company / law firm can step in as LLC manager to protect the LLC-held assets. Once any threats subside, the settlor can again step in as LLC manager.
Offshore Trust Establishment
Several foreign countries, such as the Cook Islands, Nevis, and Belize, offer strong offshore asset protection trusts. These locations’ legal statutes provide safe harbor for your assets, even when you lose a lawsuit in your home country.
Our asset protection trust setup team can help you choose the right location to establish your trust. Then, we’ll work with our reliable trustee firms in your chosen location to set up an ironclad trust structure.
Offshore Bank Account Creation
When you set up an offshore trust, you will also need an offshore banking service. Why? It is because bank accounts in your own country are under the jurisdiction of judges in your own country. So, even if your funds are in an offshore trust, keeping them in a domestic account is risky.
Is offshore banking safe? Yes, when you choose the right bank. Need some proof? Global Finance rates the safest banks every year, and as of this writing, only three of the 50 safest banks are in the United States. Even then, all three are on the bottom half of the list. So, not only does the offshore trust protect your assets, but it can also house your funds in safer banks than those available onshore.
We’ll help you set up an offshore bank account. You can then use it in tandem with an offshore trust and LLC to keep your assets protected.
Offshore Asset Protection Trust Services Overview and Key Parties
Offshore asset protection trusts are superb legal instruments for asset protection and estate planning. Established properly, they provide the strongest asset protection available. Here’s a quick overview of how these trusts work and who the key parties of an offshore trust are.
Like its domestic counterpart, an offshore trust is comprised of a trust settlor, beneficiaries, a protector, and a trustee. Some trusts also have a trust protector, though this is an optional management role. We outline each member’s function below:
Trust Settlor
The trust settlor is the individual who sets up the trust. We also refer to this person as a grantor. When you call us to set up a trust, this will likely be you. This person is responsible for creating the trust and funding it with their assets. Once the trust is funded, the assets are no longer the property of the settlor. Instead, they become property of the trust. However, there are certain strategies, such as naming oneself as a beneficiary and/or creating a trust-held LLC, that allow the settlor to maintain substantial control of their assets.
Trust Beneficiaries
The term “trust beneficiary” refers to the individual or group that benefits from trust assets. Beneficiaries have little management responsibility or control over trust assets. However, they are the only people who can personally benefit from the trust.
Trustee
Trustees are licensed and bonded third parties who professionally administrate trusts. Typically, they’re employees of a trust management company and have law degrees. Trustees are duty-bound to carry out the trust settlor’s wishes per the trust deed.
A trustee cannot typically benefit from trust assets. However, they can distribute trustee service fees at a rate established during the trust creation process.
Trust Protector
The optional protector role is a management and oversight position. The trust may grant them power to veto trustee decisions. They may also have a degree of control over trust management and distributions. In general, the protector cannot be the settlor, the trustee, or the beneficiary of the trust. In addition, it is best if the protector resides outside of the jurisdiction of your local courts.
The trust deed outlines rules regarding how each of the above roles should be carried out. It documents the purpose of the trust, how much power each party has, and how benefits are distributed. Trust deeds are highly customizable and should only be drafted with the help of an experienced professional.
Lastly, when setting up a trust, you must provide the legally required due diligence and know-your-customer documentation. International regulators want to make sure that people use trusts for legal reasons only. This security measure helps protect you and is important for maintaining the efficacy of your trust.
Offshore Trust Jurisdictions
Several countries offer offshore asset protection trusts. Choosing the right jurisdiction will greatly impact your level of asset protection. Here are four of the most popular offshore trust destinations and a brief overview of what we think about each:
Cook Islands Trust
Cook Islands trusts are widely regarded as the strongest offshore asset protection trusts in the world. The jurisdiction maintains a free association with New Zealand, which ranks as the least corrupt country of all. That excellent reputation breeds trust. Plus, Cook Islands’ laws make it extremely difficult for plaintiffs in foreign jurisdictions to challenge the validity of the trust.
Additionally, the Cook Islands has a short statute of limitations on fraudulent transfer, making it nearly impossible for a plaintiff to file and win a case in time. On the off chance they do, the plaintiff will then have to re-try the case in the Cook Islands, which is extremely expensive. Moreover, with the way the legislature has crafted the laws, the plaintiff is very likely to lose.
Nevis Trust
Nevis, a small island in the Caribbean Sea, is another popular trust destination. It doesn’t have the robust case history of the Cook Islands since it hasn’t allowed trust creation for quite as long. However, the laws there are friendly to trusts, and filing a case against a trust holder is costly. Lastly, Nevis does not allow the Mareva Injunction in cases against trusts. The Mareva Injunction allows the court to freeze assets within a trust, limiting the options your trustee can provide.
Belize Trust
In Belize, the moment the assets go into the trust, the trust protects the assets. There is no vesting period. However, it lacks the trustworthy perception that other financial services providers enjoy. So, while Belize has many benefits for settlors, those benefits come with a slightly higher risk.
Isle of Man Trust
The Isle of Man was one of the first nations that offered offshore asset protection trusts. Sadly, this jurisdiction has fallen far behind the times in their trust legislation. The high number of hoops a settlor needs to jump through is more than enough reason to look for another jurisdiction.
Learn more by reading our comparison of offshore trust jurisdictions and exploring the best countries for asset protection.
How We Set Up an Offshore Trust + LLC
When we set up an offshore asset protection trust, we first establish the trust itself. This gives you a place to deposit assets and establish other entities away from the grasping hands of creditors and plaintiffs.
Meanwhile, we create an offshore LLC. The LLC is then placed inside of the trust, where you can own a controlling stake and manage some of the trust assets. Then, if you ever run into a legal issue, your trustee can step in as the manager of the LLC to protect the assets that the company controls. Since the trustee company is not subject to your local court orders, demands to repatriate funds fall on deaf ears.
Advantages and Disadvantages of Offshore Asset Protection Trusts
An offshore asset protection trust comes with several benefits, but no asset protection strategy is perfect. There are several reasons why you might consider another trust type. Though, it’s our professional opinion that an offshore trust’s benefits outstrip their minor inconveniences. Still, to ensure you’re fully informed before you choose to set up a trust, we’ve outlined the advantages and disadvantages of offshore trusts:
Advantages
Offshore trusts have one major advantage over domestic trusts—they aren’t subject to U.S. court rulings. An offshore trustee does not have to comply with foreign court orders. Even if a creditor wins a judgment against a settlor or beneficiary of an offshore trust, the trust still protects their assets. Judges in one country do not have authority over another country’s legal system and therefore cannot enforce rulings outside their jurisdiction.
The top offshore trust jurisdictions have also created debtor-friendly laws that provide a favorable legal framework for foreign investors wishing to protect their assets. The most advanced trust legislation in the world offers immediate protection.
Disadvantages
The only real disadvantage of an offshore asset protection trust is an issue of perception. Since these trusts aren’t located domestically, they are viewed by some as complex and risky, though that’s not the case. Still, some people feel uncomfortable with things they’re not familiar with and would prefer to remain close to their assets and trustees.
Additionally, there are some extra tax forms to file to notify the IRS that you have an offshore trust and account. However, this inconvenience is minor at worst. It only takes a few extra minutes to fill out the appropriate documentation. Plus, as long as you report it, the IRS doesn’t view an offshore trust as a red flag when they view your tax filings.
Let Asset Protection Planners Set Up Your Offshore Asset Protection Trust Today!
If you’re ready to get the best defense against creditors and lawsuits possible, it’s time to set up an offshore asset protection trust. The experienced team here at Asset Protection Planners can establish your trust properly for the highest level of protection.
Click the button below to find out how we can help you keep your assets safe!
