|
|
|
Foreign/Offshore Asset Protection
For well over a hundred years, US citizens and many foreigners have utilized Offshore Trusts for Asset Protection Planning purposes. Often times when individuals hear mention of Offshore structures, they think of a scheme designed to avoid taxation reporting. Legitimate Offshore Planning, however, has nothing to do with tax evasion. Tax evasion is a felony in United States and it is not and should not be the objective of any good citizen. Offshore tax schemes have given Offshore Planning a bad name, but there is nothing wrong with setting up an Offshore structure for Asset Protection Planning purposes. Such structures are usually tax neutral, but do require substantial reporting and compliance with IRS forms and regulations. Filing these documents, however, is not that a big of a burden if one has the proper CPA and legal advisor.
The whole reason of going Offshore is to place the asset outside of the jurisdiction of the United States. With this in mind, there are two necessary considerations with regard to going Offshore for Asset Protection Planning purposes. The first consideration is whether you have enough liquid assets to move Offshore for protection and essentially setting up a nest egg. With a few exceptions, it does not make sense to go Offshore unless the individual involved has substantial liquid assets that can be placed Offshore because the U.S. Courts have jurisdiction over any assets within the country and can attack those assets. Accordingly, Offshore Planning usually requires some substantial liquidity that can be invested Offshore. The second consideration for going Offshore is whether an individual has international connections such as family offshore, owning property internationally or having an offshore business. This is not a strict requirement, but does help to sustain the Offshore structure.
A Foreign Asset Protection Trust is a trust that is set up in an Offshore jurisdiction which has enabling trust legislation providing for substantial protection against creditors of the Trustors. The biggest advantage of the Foreign Asset Protection Trust is the fact, that by its very nature, any legal attack against the assets in the Trust is transferred abroad to a different legal system. There are other advantages to the Offshore structure that are contained in the Article entitled “Asset Protection Planning; Why Go Offshore” which you can download from our “FREE!” page.
|
