Offshore Asset Protection Strategies
Not As ´Offshore´,
Or As Mysterious As You Might Think!
If you think that moving your assets offshore is only something that money-launderers, tax-evaders and other scofflaws do, guess again. There are perfectly legitimate — and perfectly legal — asset protection strategies that involve offshore planning.
In fact, failing to consider offshore strategies within an asset protection plan would be a grave mistake. It is a widely-overlooked strategy, yet could be the one thing that protects your fortune (however big or small it may be) in face of aggressive creditors.
The institution that trains CWPP ™ Advisors, The Wealth Protection Institute, is the only educational institution that trains advisors in offshore asset protection planning. You won´t find courses in offshore asset protection planning in law schools, or within accounting, insurance, finance, or MBA curricula. (Instead, accurate understanding is passed from attorney to attorney in large law practices specializing in offshore strategies.) And not only is that sad, but it is also dangerous for many unknowing Americans who lack access to the best strategies to protect their assets.
While space is too short to go over offshore planning in depth, the three main tools used merit a brief discussion:
• Offshore Asset Protection Trust (OAPT)
Many experts consider the OAPT to be the strongest asset protection tool around. Consequently, anyone who works with offshore asset planning uses these frequently. Since OAPTs get set up in foreign jurisdictions, these waters can be treacherous. You need to work with an expert who knows what they are doing.
• Offshore Limited Liability Company (LLC)
If you’ve looked at our page on domestic asset protection here, you´ll know that domestic LLCs can provide powerful protection. Because of the legal and practical inability to collect against foreign LLCs, even if there are “charging orders”, offshore LLCs are frequently provide better protection than domestic LLCs.
• Offshore Captive Insurance Companies (CIC)
CICs have unique characteristics when it comes to the U.S. Income Tax Code, giving this vehicle the potential to minimize taxes as well as to protect assets. How well does it work? Well, some have said that 80% of the S&P (Standard and Poor’s) 500 companies own at least one, and some own even more.
Common misconceptions about Offshore Asset Protection
• Your money always moves offshore
Even though it’s called Offshore Asset Protection, surprisingly, the money in many instances remains in the United States. Properly arranged “offshore” planning might incorporate a domestic LLC, financial instrument (insurance, annuity, etc.), or investment account which, in turn, is owned by an OAPT. Only if a lawsuit is filed against you is your money removed to an offshore jurisdiction.
• Offshore planning allows you to avoid taxes
NO! And if someone tells you that you can avoid paying U.S. taxes, run the other way. There are many effective tax-minimization strategies that can be used in combination with offshore protection strategies, but the primary goal is to protect your assets. In fact, the IRS looks especially for offshore tax avoiders.
• Because an OAPT is trusteed by someone out of the country, you run the risk of having the trustee steal your money.
Like anything, there are reputable companies and not-so-reputable companies. Is there a risk? No more risk than you run a risk with your money at Bank of America, if you work with large reputable institutional trustees and/or investment managers In fact, it’s quite possible that your money is sitting in a bank account at Bank of America owned by a domestic LLC.
Summary
Offshore asset planning differs from domestic asset planning because foreign jurisdictions are involved. Select foreign jurisdictions have more favorable asset protection laws than those in the United States. That added protection offsets any additional complexity (which, in truth, is no more complicated than dealing with any part of the U.S. Tax Code). Surprisingly, your money can be protected using offshore asset protection strategies and still remain in the United States.
We pride ourselves in dealing with only the most reputable companies in setting up offshore vehicles, and look forward to discussing this fascinating, important, and greatly under-used strategy with you. Since assets moved after a lawsuit is initiated potentially have far less protection, the time to keep your wealth safe is today, while you’re still thinking about it.
Call us today at 1 (805) 376-8070 to discover more, or sign up for a free consultation where you can type in your questions, and we’ll get back to you quickly with answers.
While offshore strategies are helpful to many people who would not guess they could benefit, you will want to see if domestic asset protection strategies are sufficient for your purposes. Don’t be taken by salesmen who want you to buy expensive plans you don’t need. Call us today with your questions, and we’ll help YOU decide what is best for you.
