Our San Diego based asset protection law firm is nationally known for providing both Offshore and Domestic asset protection services tailored to our clients’ needs. This unique aspect of asset protection law allows the attorneys at Day & Associates to craft the ideal legal plan for you. From the creation of Family Limited Partnerships, Limited Liability Companies, or Corporations, to establishing sophisticated offshore asset protection trusts, Day & Associates has the experience and proven record of providing superior asset protection for a very wide range of clientele.
Offshore Asset Protection Services
The creation of an Offshore Asset Protection Trust, or (OAPT), is considered the strongest asset protection tool available. This is an irrevocable trust domiciled or filed in a jurisdiction outside the United States.
An Offshore Asset Trust is often used in conjunction with Family Limited Partnerships (FLP), Limited Liability Companies (LLC), or Corporations, in order to strengthen your control and flexibility of your assets. This legal combination of entities allows you complete control over your assets while removing them from US court jurisdiction. Essentially, we’re importing foreign law while keeping your assets here in the United States, which is always strongly recommended.
When you enlist Day & Associates to create an Offshore Asset Protection Trust, your assets are now under the jurisdiction where the Trust was filed. Combining an Offshore Asset Protection Trust with a FLP, LLC, or Corporation doesn’t mean you lose control of your assets; it simply makes it extremely difficult for any adverse party to gain access to the assets in your Offshore Trust.
Are some offshore jurisdictions more favorable than others?
Yes, our Offshore Asset Protection law firm has extensive experience with multiple jurisdictions around the world considered to have favorable offshore asset protection laws. These jurisdictions consist of the Cook Islands, Isle of Man, Belize, Nevis, Cyprus, Caymans, Bahamas, Gibraltar, and St. Vincent. All have distinct legal advantages over each other, enabling Day & Associates to select the appropriate jurisdiction for your needs and desires.
Does an Offshore Asset Protect Trust offer 100% protection from an adverse party or plaintiff?
Nothing is 100% guaranteed in the legal world, but by having the correct offshore asset protection plan in place, accessing those assets is very difficult. The reality is that anyone wanting to gain access to your offshore assets would need to prove Fraudulent Conveyance, which has a very short statute of limitations. Some jurisdictions, under the right circumstances, have no fraudulent conveyance statute of limitations, meaning protection can be gained immediately. In many offshore jurisdictions, statute of limitations can be as little as 2 years from the date the assets were transferred into the trust. Although 2 years sounds like a very long time to the average person, in the legal world, this isn’t a lot of time.
Fraudulent Conveyance Lawsuits
Due to this short window, most commonly, the plaintiff will run out of time to properly pursue your assets. At that point your adversary must settle with you or move forward with a Fraudulent Conveyance lawsuit against your Offshore Asset Protection Trust, with no guarantee of success. Since your trust was filed offshore, your adversary must initiate the legal process in the jurisdiction in which it was domiciled. This further complicates things for the plaintiff because most attorneys outside the US are generally not allowed to accept contingency fees and “real” money is needed.
Additionally, the United States is the only country in the world that doesn’t have a “loser pays” system in place. In turn, offshore courts will probably require a cash bond of up to $150,000 just to file a lawsuit in that specific offshore jurisdiction. Once the plaintiff initiates a lawsuit against your trust, most of the time the “burden of proof” lies with the plaintiff, depending on the jurisdiction the Offshore Asset Protection Trust was domiciled in.
The litigating party must present any proof of Fraudulent Conveyance within the statute of limitations. Often the plaintiff must prove fraud beyond a reasonable doubt as well. Any plaintiff or pursuing adversary would need to “jump through hoops” in order to proceed with a lawsuit against your offshore trust. Most plaintiffs not only find this process very time consuming, but costly, deterring them from moving forward.
Does an Offshore Asset Protection Trust provide any tax advantage or disadvantage?
An Offshore Asset Protection Trust is considered a tax neutral entity and provides NO tax advantages or disadvantages. It is considered a “grantor trust” for tax purposes and deemed a “disregarded entity”, minimizing any administrative burden on your tax consultant, accountant, bookkeeper, or CPA. Any Offshore Asset Protection Trust created by Day & Associates, Incorporated, is solely used as an estate planning tool and any income earned must be reported and paid annually to the IRS.
The IRS has specialized reporting forms that must be filed when establishing and maintaining an offshore asset protection trust. These forms are Form 3520 and 3520-A, which are required by law. They can be found on the Internal Revenue Service’s website and downloaded for free. By staying in compliance with this law, you further strengthen the legitimacy and legality of your offshore trust when faced with a skeptical judge.
What’s the advantage to combing entities in an offshore asset protection trust?
There are multiple advantages to combining an offshore asset protection trust with a Family Limited Partnership, Limited Liability Company, or Corporation. When combined, your assets receive ultimate protection and you gain the most out of your estate.
The most commonly used entity with an Offshore Asset Protection Trust is a Limited Liability Company or LLC. It’s often used in conjunction with your offshore trust because it allows your trust to own 100% of the assets, while using a non-ownership person – you – to manage the LLC. As manager, you maintain complete control and decision making authority, but have no ownership in the LLC. Having no ownership in the LLC means the LLC is not subject to your creditors, the strongest possible asset protection.
For more information on our Offshore Asset Protection services, please contact us.