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Best Asset Protection, Asset Protection Trust Print E-mail

There is no better way to protect your affairs and privacy from potential adversaries than Offshore Asset Protection through the creation of a well constructed offshore structure. As many countries become increasingly more litigious, governments continue to encroach on civil liberties and privacy and technology continues to make it easier for hungry lawyers to search for assets while making the decision whether or not you are "sue worthy", many would benefit from establishing an offshore presence to protect at least a portion of their assets.

Offshore Asset Protection Structures

A variety of offshore components may be utilised in an offshore asset protection structure including private foundations, offshore trusts, offshore companies, offshore bank accounts and/or an offshore brokerage account. It may even be possible to maintain assets in their current location while merely transferring ownership of the assets into an offshore asset protection structure as well.

Offshore asset protection structures generally involve use of an offshore trust or offshore private foundation perhaps coupled with one or more underlying offshore companies depending on the quantity and type of the assets to be held in the structure.

Clients are advised that in order to set up a proper asset protection structure, the client must be willing to give up "ownership" of the actual assets being placed into it. Not to worry though, as many legal and contractual safeguards are put into place. Additionally, it is possible to appoint protectors or guardians as well as several other roles within the structure to provide a further comfort level for the client.  There are several structuring options available whereby the client can retain control in various roles within the structure if desired.

Offshore Trusts

For those mainly living in common law countries where the concept of a "trust" is recognised, a properly structured offshore trust can provide a wealth of benefit for estate/succession planning, avoidance of forced heirship and inheritance taxes, protection against creditors and other adversaries and more.  In order to achieve these benefits, it is imperative that the trust is structured and administered properly.  Indeed, a properly structured and administered trust can be an excellent tool; however, a surprising number of offshore trusts that are established are not valid and would not hold up in a court of law for a variety of reasons.  The most common issues are that the Settlor never officially transfers any assets to the Trustee or the Settlor maintains so much control that the intention of the trust is called into question by a judge.  These can have detrimental consequences.

A trust must be carefully crafted after a close consultation with the client to ensure it serves the intended purposes and to ensure that the validity of the trust cannot be challenged at a later date.

Private Foundation

For those living in a civil law country where the concept of a trust may not be recognised, the private foundation is likely the better option; however, a private foundation may also be useful for those living in certain common law countries as well.  The key difference with the trust is that the private foundation is usually found in civil law countries where it is a product or specific legislation.  Unlike the trust, a private foundation is a separate legal entity and is not susceptible to an "validity" issues.

Offshore Bank Account

The last but probably most important component of a offshore asset protection structure is the offshore bank account. Unfortunately, this is probably also the weakest point of any structure and the likely target of any queries into your affairs. Especially considering the increasing disregard of legal structures and focus on the "beneficial owner" in some countries, it is critical to both create the right structure and partner with a solid offshore bank for your offshore asset protection structure.

Sterling Offshore is able to provide introductions for the purpose of establishing an offshore bank account. The applications and requirements vary depending on the institution.

Contact us today for a free consultation regarding the establishment of an offshore asset protection structure designed specifically for yours your client's needs.


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