Offshore asset protection includes the use of many powerful legal tools in jurisdictions that have debtor friendly laws and dedicated legal statutes protecting the assets of foreign investors.
There are several of these financial haven jurisdictions that cater to foreign investment by offering the world’s strongest and most flexible legal framework that protect assets, such as the Cook Islands, Nevis and Belize to name a few.
The use of corporations, LLCs and trusts in these jurisdictions provide a high level of protection, and when these instruments and jurisdictions are combined, it is the strongest asset protection planning one can implement.
Offshore asset protection services offer an individual the world’s strongest privacy laws, the safest banking and case-law-backed asset protection statutes using multiple legal jurisdictions in a single plan.
These protective jurisdictions frown on frivolous lawsuits, unlike the litigious U.S. legal system. When assets are protected offshore it creates a massive legal hurdle to pursue them and in most cases is cost prohibitive for a legal opponent. Just by having your assets encumbered in a properly established offshore service plan can reduce or nearly eliminate the chances of being sued.
Mechanics of Offshore Services
When assets are encumbered in offshore planning tools, the last layer of defense is complete separation from one’s home legal jurisdiction whereby foreign court orders are not recognized in the offshore jurisdiction. Even in the event of a lawsuit resulting in a judgment, a creditor can make claim to one’s assets with court orders, however those orders would not be recognized. Should a judgment creditor wish to pursue the assets offshore, the attorney team would have to satisfy the foreign jurisdiction’s legal requirements, which is where the real battle begins.
In almost all cases pursuing assets offshore will require local legal counsel and building the case with a new attorney team in the foreign country. The top offshore jurisdictions do not allow local counsel to take cases on contingency. This is generally enough to deter the pursuit of an individual’s assets. In some cases the foreign jurisdiction requires a board review of the case before it is allowed to proceed. The most protective jurisdictions have huge bonds that must be posted in order to have a case reviewed, sometimes in excess of $25,000, that is non-refundable or forfeited should the case not be accepted. Only a legal opponent with near absolute success odds would play this far into the process.
Domestic and Offshore Services
Offshore legal structures can also be used to augment domestic asset protection planning for individuals who are less comfortable with an entirely offshore service plan. There is a myriad of ways to take advantage of these protective vehicles and one of them is to utilize an offshore instrument as a last layer of defense against a judgment.
Through the use of business entities as control instruments and an asset protection trust, day-to-day management of assets can be conducted onshore for simplicity and in the event of legal duress custom management provisions transfer control to an offshore legal instrument. Combining on and offshore planning services is more complex and requires careful implementation, however can bridge the gap for those who wish to utilize a mostly domestic service plan with the benefits that offshore vehicles offer.
How it works
By establishing several asset protection vehicles you can create a judgement proof plan with a high degree of hands-on asset management. The key element here is an offshore trust that will own a private business entity. The company is used as the management tool, the manager is by default [you] the trust settlor. Custom provisions within the trust deed specify management roles. When the trust is set up properly with asset protection provisions, the trustee can remove the manager from duty when necessary, according to the terms of the trust. Legal duress can trigger the management transfer whereby the offshore trustee automatically removes the default manager from any asset control. With the assets in control through an offshore trustee s/he cannot be compelled to relinquish assets by a foreign court.
This allows an individual to maintain control over all of the day to day activities and the assets held within the trust, when times are good – in the event of legal duress, only management duty is transferred, therefore a transfer of assets cannot be challenged by a creditor.
Privacy is another layer of protection with offshore services. The entire list of top recommended jurisdictions cannot disclose the names of the owners to any foreign government, by law, unless an act of terrorism, money laundering or criminal atrocity has taken place.
Lawsuit deterrence, judgment proof protection, privacy and settlement negotiation power. – once a legal opponent sees the uphill battle involved with pursing assets protected offshore, plus the additional legal costs, he/she may reevaluate the merits of filing a lawsuit or settle for a fraction of the intended settlement. This is a strong layer of protection and can be achieved by simply implementing a service plan offshore.