Even the strongest asset protection tool in the world can have an Achilles heel someone has not drafted and maintained it properly. In order to maximize the benefits of any asset protection vehicle you must ensure that an experience professional has scrutinized the legal details. You want to make sure that an expert has structured it in your favor and you maintain it throughout the years. That is what a professional asset protection strategy is all about; protecting you from exposure. It is completed by an experienced organization that has established plans that have weathered the storms.
Drafting an Asset Protection Trust Deed
When setting up a trust to protect your wealth, the protection comes in the form of legal provisions that comply with the trust jurisdiction’s laws. This means that the better your trust is written properly, the better it protects you in court. The trust working determines how much protection you have and the types of attacks it will shield you from. For example, your trust deed sets forth the management of the trust assets. The deed will contain default provisions as well as custom provisions.
The custom provisions are where you are able to maximize the personalized benefits of an asset protection trust. This requires in-depth knowledge of and experience with the legal framework as well as the trust jurisdiction’s laws. The drafting of a trust must also account for state and federal tax laws related to income, gift, generation skipping and estate planning. Drafting an asset protection trust is generally more complex than provisioning other trusts due to fraudulent transfer considerations, bankruptcy, banking and tax laws. When drafting these types of trusts one must account for case law in both jurisdictions, that of the trust and the domiciles of the beneficiaries and/or settlor.
Offshore Asset Protection Trust
In the case of offshore asset protection trust drafting other critical issues are provisions for the possibility of legal duress against the trust settlor, protector or trustee. This is where a skilled professional carefully drafts your trust language. They do this in order to protect against court duress against the trust stakeholders. The sizable weight in your favor is that the trust’s primary supervision is under a foreign jurisdiction’s court. That is, the jurisdiction of your trustee, and not the jurisdiction under which someone is attacking your assets.
Your trust instrument requires these special provisions in order to maximize the protective benefits and legal barriers. In the absence of carefully drafted trust provisions, a “court test” in your home jurisdiction could land you in an ominous situation. Your legal enemies may evaluate where the trust is administered. The will analyze the tax home of the beneficiaries. The they will perform other simple checks to scrutinize trust governance decisions. An experienced asset protection planner specializing in these types of trusts knows this and already has appropriate language for drafting your trust.
If someone ever challenges your trust, they will challenge the trust deed and the language therein. That will substantially determine decisions that could affect whether the trust protects you or not.
Privacy isn’t protection. However it can add a layer of deterrence to a legal opponent looking for a payout. The first level of protection comes via the appearance of insolvency through privacy of ownership. Before filing a lawsuit, your legal opponent will likely look for your pot of gold. By implementing financial privacy techniques you remove your assets from the public radar. This means that before spending tens of thousands of dollars obtaining judgment, your potential enemy may think he has nothing to target.
You can build privacy in both your home jurisdiction (in select states) as well as the top offshore business jurisdictions. At home you can own real property in land trusts which removes your name from public property records. Privacy of ownership of a business corporation or company is also available to you through nominee officers, directors and managers. This means that when you form a new business entity you can hire our nominee officers and directors whose names will appear in the public records. This includes annual officer and director filings for corporations; manager filings for LLCs. It is not as important on internal business documents or agreements such as bylaws, internal amendments or operating agreements. These are not public record items. You still have management and financial control, and power and signature authority over business transactions. Under the agreement, the nominees, will only act under your sole direction.
By privately owning a business entity, your personal name will not appear on publicly filed documents. Again, you and the nominee both sign an agreement when the business is formed. Your officer/director/manager is solely employed to act as a nominee for purposes you specify, and under your direction.
Banking and Asset Protection
Over the last 10 years it has been increasingly difficult for Americans to open offshore banking accounts. It’s not getting any easier. The foreign accounts tax compliance act (FATCA) started in 2013. In addition, there were previous anti-terrorism and money-laundering initiatives post 9/11. As a result, banks have tightened their requirements on new and existing accounts.
Most people who attempt to open offshore accounts on their own end up empty-handed. Opening a foreign account is a lengthy and complicated process. Unless guided by someone with experience, the bank you choose many not give you the privacy, protection, safety and convenience you’re looking for. We gave decades of banking relationships. Plus, we and our associated have the title of “eligible introducer.” As such, we can assist you in opening a new account relatively quickly as part of your asset protection plan. Very few asset protection planners specialize in banking relationships.
Accounts opened easily, a reasonable initial deposit amount and less red tape is the benefit of asset protection experience available to you here.
Professional Asset Protection Conclusion
You likely want most protection available, the highest level of financial privacy and a bank account that meets your needs. Doing so requires careful selection of your planning professional. Precise legal language, proper entity formation and a properly established bank account are some of the best things you can do to prevent someone from jeopardizing your wealth in a legal battle. For more information on planning, protective vehicles and banking worldwide, call for a free asset protection strategy consultation.