General Asset Protection Strategies
Asset protection strategies are designed shield assets from the risks of seizure. They come in varying strengths. There are protective trusts to keep assets at arms-length from creditors. There are land trusts for privacy of ownership. Then, there are LLCs, and limited partnerships to put assets into cocoons that are challenging to penetrate.
The bottom line? Discuss your situation with a specialist. The expert will ask what assets you have and how much equity is in each. Certain legal tools are proposed based on the type of asset, its value and the level of protection you need. Then, one will have to choose how strong the asset protection plan should be in order to thwart the legal challenge.
Asset protection strategies usually involve placing ownership of assets into legal tools rather than one’s personal name. In this vein, Rockefeller said, “Own nothing. Control everything.” Don’t own assets in your own name. Own them in legal tools that make it difficult for others to take them.
In general, a strategy that provides the most protection offers the most peace of mind in a lawsuit and vice versa. When your case winds up in court, you will sleep better at night knowing that even if you lose, you can retain your financial security.
Facing the Challenge
If a protection strategy is challenged by a creditor it will be scrutinized. It is the job of the opposing legal team to have an individual’s protection plan disregarded by a court. If any legal structures were improperly established or managed they can be pierced. If funds of a corporate entity were commingled with one’s personal bills its veil of protection can be pierced. A legal opponent’s goal will be to show that asset protection vehicles are mere shell entities. They may claim the do not have real business purposes and try to break through them to get to the assets of the owners, officers and directors.
With properly established and managed legal entities, proper funding, a real business presence and corporate compliance, a creditor will be hard-pressed to pierce its protection. A strategy must be properly established, funded, managed and maintained to maximize protection. This checklist can be satisfied through business programs specifically designed to meet the needs of a legitimacy test.
Choosing a Strategy
We specialize is asset protection strategies as well as a variety of recommended plans to meet varios privacy and protection requirements.
Domestic Privacy and Protection
In order to establish immediate privacy and protection with domestic legal vehicles, trusts and LLCs are often used. When an asset is titled to a trust it is considered separate from individual. Property owned by a trust is owned privately providing the first layer of protection against lawsuits. Assets owned by a properly established LLC can be protected from personal liability of the business owners. This creates the first layer of liability protection.
These concepts can be strengthened through the use of different types of trusts and multiple business entities.
Domestic asset protection strategies can provide a substantial level of financial security. They can be established locally. The problem? They are under the jurisdiction of your local courts. A results-oriented judge may ignore them and allow asset seizure regardless of theoretical protections they offer. That is why offshore asset protection strategies tend be much more effective.
Offshore financial havens created legal statutes that protect the personal assets of foreign investors. This offers individuals the strongest personal financial privacy and protection in the world. It is also a strategy many people use to protect assets after a lawsuit is filed.
An offshore asset protection strategy can implement the laws of multiple foreign jurisdictions combining the strongest corporate and financial privacy available. The most advanced and case law backed trust laws in the world were created specifically to attract foreign investment. They are established individuals seeking bulletproof wealth protection outside of their domestic legal system. It is one of the strongest ways to protect assets from lawsuits.
What Offshore Protection Offers
The biggest benefit an offshore protection strategy can offer is lawsuit deterrence and judgment proofing. Protective jurisdictions frown upon frivolous lawsuits and predatory litigation by making it very challenging for creditors. Offshore trusts in the Cook Islands are almost bulletproof. Their statutes make it very expensive to pursue assets encumbered in a plan using these legal instruments.
The only winners in a lawsuit are the lawyers. An offshore protection strategy can easily be the difference between being sued and not. A lawsuit avoided is a lawsuit won. In the event of a lawsuit resulting in a judgment, assets protected offshore would have to be pursued in the foreign jurisdiction. This is because a judgment from one’s home legal jurisdiction would not be recognized in the offshore country.
Utilizing offshore legal tools can be used in concert with domestic vehicles in a single asset protection strategy. Control instruments offer individuals significant hands-on asset management with the ultimate protection of foreign legal statutes.