Advantages of an (International) Offshore Asset Protection Trust
Among the numerous advantages of an offshore asset protection trust are two primary ones that attract most investors: asset protection and control of your own assets. In the international regions mentioned above, and some others, United States judges and courts have no jurisdiction regarding trusts. This means that creditors and others seeking a judgment against you in the US cannot compel the trustee of an international trust to surrender funds or other assets for the settlement of their claims.
There are several stable countries that do not recognize judgments that originate in a foreign country. Any creditor that desires to pursue your assets placed in an international trust must sue you in the country that maintains the trust. However, these countries have significant legal barriers against this, making them more “defendant friendly” than the United States.
Additional asset protection can be obtained by diversifying the jurisdictions involved in your asset planning. For example, you can establish international bank accounts in Belize along with a Belize LLC to hold the accounts, then establish a trust in Nevis to hold the LLC. You may manage the LLC while choosing a resident or entity of Nevis to serve as trustee of the international trust. You would then have control of the assets of the LLC, including full access, yet they are owned by the trust.
In this manner, all completely legal for US and international purposes, you place your assets under the protection of two different offshore legal jurisdictions, each with significant protections, but still enjoy the benefits of those assets. An asset protection attorney from Mortellaro Law in Tampa, Florida, can advise you further about how to diversify control of your international assets for the maximum amount of protection that is legally available.
Some additional benefits of international asset protection trusts include:
- Increased investment opportunities – since an international trust is not a US citizen, there are fewer restrictions on where and how investments can be made by the trust.
- Friendlier banking regulations – again, an international trust is not a US citizen, and therefore is not beholden to certain US banking laws (nor are foreign banks that deal with your trust).
- Better tax planning opportunities – an international trust does not eliminate your US tax responsibilities, but it does open you up to other investment opportunities that receive favorable tax treatment.
- More estate planning advantages – placing your estate assets into an international trust affords them significant protections that are not available when they are under US jurisdiction.
Remember, however, that these benefits, although great, are not unlimited. An asset protection attorney from Mortellaro Law can explain the details of how all of this works. But you should remember what an offshore asset protection trust does not do:
- It does not help you to escape from current creditors – fraudulent conveyance statutes apply and are included in the laws of most all reputable international jurisdictions.
- It does not eliminate your tax obligations as a citizen of the United States. US citizens must report and are tax on worldwide income, including international trusts.
- It does not allow you to “hide” assets. Your assets are protected legally from seizure, but they are not hidden from discovery.
- It does not work well with assets that cannot be moved outside the United States, such as real estate within the US.