While amassing a fortune is hard, it may appear even trickier to protect your assets. Even if you are as clean as a whistle, asset safeguard is not guaranteed, especially in nations as lawsuit-happy as the US or Germany. With this in mind, moving your assets offshore sounds like a smart idea that is worth trying, and the resulting benefits are pretty apparent.
Offshore trust asset protection is a tool that makes use of the strengths offshore laws offer to protect both trustors and beneficiaries, leaving greedy creditors empty-handed. Most popular offshore jurisdictions do not recognize foreign court judgements.
So, if an action is filed against you in your home state to seize your assets and the resulting judgment is positive, it will be invalid in Nevis or the Cook Islands. To injure the above judgment in the said offshore jurisdictions, the creditors will have to bring a new local case, which is challenging to do in Nevis or any equally reliable offshore asset protection jurisdiction.
Let’s see how the scheme functions. Willing to protect their assets, a trustor establishes a trust in a reputable offshore jurisdiction and moves their assets thereto, while appointing a trustee to manage them and making a trust deed that contains asset management provisions with the said trustee.
The title to the assets is transferred to the trustee as well. At long last, the disputable assets are no longer within the grantor’s native jurisdiction and their home courts have no authority over them.
In case of trusts, pursuing a legal action against them in Nevis is costly (any claimant will have to first place a USD 25,000 bond with the local Ministry of Finance) and with local laws favoring trustors and not creditors, the outcomes are unlikely to be positive for the claimants.
Even more so that in Nevis, the limitation period makes 1 year only, and the proof burden is extremely high for civil cases that shall be proven beyond any reasonable doubt, i.e., with the 90% probability that the creditor’s allegations are true.
An important thing to remember is that the trustor shall set up an offshore trust and transfer their assets thereto before any charges are brought against them in their home jurisdiction, otherwise the transfer will be considered fraudulent.
The jurisdictions considered optimal to set up an offshore trust in are listed below:
- Bahamas
- Belize
- British Virgin Islands
- Cayman Islands
- Cook Islands
- Luxembourg
- Nevis.
With the complete asset protection the said tax-free offshore jurisdictions provide, your assets are in a safe place, and the one thing left to handle is choose the right bank to open an account with.
Although the result is well worth it, setting up an offshore trust to protect your assets is no easy fit. To avoid breaking any laws, you should be well aware of multiple legal procedures and steps to follow. This is something that is rather challenging to handle on your own, and seeking expert assistance appears the right thing to do.
With their deep experience in offshore asset protection and trusts, International Wealth industry pros are glad to offer you the expert advice and assistance you need. Where necessary, we will take all your worries away by planning, preparing, and doing everything needed to protect your assets, be it by moving them to an offshore trust or otherwise.
