Offshore Asset Protection Trusts

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Do Offshore Asset Protection Trusts Work???

Offshore Asset Protection Trusts are the ultimate in asset protection when part of a proper asset protection structure.

There are some jurisdictions that have deliberately set up their legal codes for individuals in other countries (such as the US) who wish to protect their assets.

These trusts allow the trustor (person who set up the trust) to have substantial control over trust assets and activities in usual circumstances, but prevent the payment of trust assets to satisfy foreign (in this case US) court judgements.

One would err badly were one to assume these trusts lack legal or ethical standing.

The foreign trusts have an advantage in that they legally can ignore US Court Orders.

How a Belize Trust Protects Your Assets

One of the brightest stars in asset protection havens is Belize, formerly British Honduras, in Central America.
Example: A Belize International Trust is established by an American Trustor. The trust then establishes a Belize LLC and appoints the Trustor as LLC Manager.
The Trustor manages the investments of the LLC (and thus the Trust) and has full control of trust assets.

The Trustor gets sued. The Belize Trustee steps in to manage the LLC and refuses to pay off any foreign court orders in alignment with Belize law and the carefully crafted trust document.

Everything goes on as before. The Trust still pays distribution consistent with trust documents, like the Trustor’s mortgage or daughter’s tuition.

Misconceptions About Offshore Trusts

Americans often have a negative perception of offshore trusts, associating them with criminals, money laundering, and shady dealings. Offshore trusts, also known as Foreign Asset Protection Trusts (FAPTs), are a legitimate tool for asset protection.

FAPTs are established in jurisdictions with strong trust laws which protect assets from creditors and lawsuits. Properly set up, these trusts are EXTREMELY effective.

Another common misconception is that Trust Assets and accounts must be in the offshore trust country. A trust is simply a legal agreement in the trust jurisdiction. Assets including bank accounts can be located around the world.

Gradients of Asset Protection vs. Rising Legal Threats

Rising Legal attacks threaten anyone with some degree of wealth. Attorneys, short on paying clients, spend otherwise-idle hours suing the wealthy on contingency. Even a weak case may settle simply to avoid the legal expense. Doctors, business owners, landlords, and most everyone else are increasingly subject to such attacks.

Tools to protect your assets include:

  • Insurance
  • Operating LLCs in states of operation.
  • Out-of-state anonymous Holding LLCs
  • Domestic Trusts
  • Offshore Trusts

These strategies work. They are best done in advance. Contact Torchlight Tax at 877-758-7797 for a free consultation. Visit the Torchlight Tax YouTube channel for more detailed information.

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