Planning is about looking ahead. By acting now, you can build strong barriers against any future threat to your wealth — especially threats from malicious lawsuits.
Timing for Asset Protection Planning
Time is on your side if you plan early, because courts are reluctant to undo transactions you’ve undertaken before a specific event exposes you to the threat of a lawsuit.
But if you wait until a lawsuit emerges, there may be little you can do to protect yourself. For example, if you establish a trust for your children or grandchildren after you’ve been threatened with a lawsuit, the trust will be vulnerable. Should you lose the lawsuit, in most jurisdictions the winner would have little trouble reaching the assets you wanted to protect for the next generation.
So to plan well, plan early.
Basic Strategies For Asset Protection
One strategy stands out as the most powerful — and by a big margin. And there is a practical way for you to use it. But first, let’s look at the more common strategies. You may have considered using one or more of them, so you should know their strengths and their limitations.
Simple gifts to family members. By giving property away, you may protect it from future lawsuits aimed at you — but you expose it to litigation aimed at the recipient of your generosity.
Swiss annuities. Laws in Switzerland favor annuity owners and make it hard for a lawsuit winner to collect by seizing an annuity — if everything takes place in Switzerland. But if you lose a lawsuit in the U.S., expect the judge to order you to liquidate your Swiss annuity. Your asset protection planning could be undone at the bang of a judge’s gavel.
Domestic trust (formed in the U.S.). If you fund the trust early, it probably will be beyond the reach of litigation aimed at you or at anyone else. But this only works if you exclude yourself as a beneficiary, so that you can’t get the money back even if you need it for your own support.
Domestic LLC (a limited liability company formed in the U.S.). Depending on the laws of your state, a lawsuit winner may find it difficult to reach property you’ve transferred to an LLC so long as the property stays there. But he can grab anything the LLC eventually distributes to you. Thus the LLC may enable you to play a waiting game, which would help you negotiate a settlement with your attacker. But while he waits for money, you also must wait.
Offshore LLC. A limited liability company organized in the right foreign jurisdiction avoids the uncertainties that come with a domestic LLC. You can be more confident that you will control the timing of any settlement with your attacker.
Each of the common strategies for asset protection planning has some value. But none does the job thoroughly. For true peace of mind, you need a plan that is so sturdy and so difficult to break into that it will demoralize any potential lawsuit attacker. When your assets have that kind of protection, any potential litigant will see that a lawsuit would be a waste of his time and a waste of his money.
You can have that kind of safety. But for most investors it is available only through…
The Strongest Plan: Protecting Assets With a Lawful Offshore Trust
An offshore trust is the most powerful and versatile of all financial safety strategies.
- A lawful offshore trust can protect almost any type of property.
- So long as you hold back enough assets to cover your existing and reasonably foreseeable obligations, the trust can be a brick wall against future lawsuits — even though you are are included as one of the beneficiaries and can receive distributions at any time .
- An offshore trust can open up income-tax saving opportunities that you probably will miss if you restrict your asset protection planning to the U.S.
- The right kind of trust works with all conventional estate planning strategies— and it lets you to do much more to cut or eliminate estate tax. With an offshore trust, you can get assets out of your taxable estate even though they still will be available for your support.
- An offshore trust eventually separates from the U.S. tax system. Then your family gains the opportunity to accumulate further wealth without the drag of income tax or repeated estate tax.
- Your offshore trust can be the beneficiary of your living trust or of your will.
- An offshore trust isn’t just stronger than all the other strategies for asset protection planning — it can include them. For most families, an offshore trust is powerful enough by itself. But, depending on your goals and circumstances, you can use the trust to hold a Swiss annuity, to own an LLC or to hold the shares in an international business company (IBC).
Offshore Trusts No Longer Costly
Until recently, asset protection planning with an offshore trust was reserved for the wealthiest families. Offshore trusts were cumbersome to establish and expensive to administer. But Passport Financial’s Offshore Trust Kit has eliminated most of the effort and expense. Now the brick-wall lawsuit protection and the valuable tax-saving opportunities of an offshore trust are comparatively easy to achieve — and the cost is less than the expenses of a simple mutual fund investment.
The Offshore Trust Kit is complete. It gives thorough, detailed answers to all your questions about offshore trusts and how to keep your trust completely non-controversial. The Kit also provides:
- A tax opinion from a U.S. lawyer who specializes in asset protection planning
- A CPA’s memorandum on the reporting rules that keep an offshore trust completely non-controversial
- A legal opinion from an international law firm specializing in offshore trusts
- All the ready-to-use documents you need to quickly and conveniently establish a lawful offshore trust for yourself and your family.
The easiest and least expensive way to gain the safety of a lawful offshore trust is with the Passport Financial Offshore Trust Kit.
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