Asset Protection Planning
is proactive legal action that protects your assets from threats such as creditors, divorce, lawsuits and judgments. Call now to let our attorneys help you.
How do you enjoy peace of mind in a lawsuit? You do so by protecting your assets early in the process. Whether or not you expect any legal threat to occur, you should know that it could always happen. As such, you want to make sure that you have peace of mind whether or not the legal threat has reared its ugly head.
For most asset holders, one major concern is running into a predatory lawsuit. Other concerns include fear of an income tax hit, the possible loss of business in a legal battle or through estate tax, and the fact that many Americans find it difficult to depend on banks and other financial institutions after the Recession. Of course, other possibilities and reasons why you should protect your assets do exist, but these are some of the more common ones.
For many, it seems difficult or confusing to invest finances anywhere other than in the United States. Some simply feel it is easier to keep depending on the United States for their investments. The problem is that with 4.4% of the world’s population, the US has 96% of the world’s’ lawsuits. So, one thing that many asset holders know, though, is this. You don’t have any assurance of protection in the United States when there is a 100% chance the courts will empty your US bank accounts. As a result, more and more Americans are turning to the foreign option recently to protect their assets.
If you were not already aware of it, realize that the IRS can freeze any bank account in the US, and provide you with no warning as to why. There are some reasons as to why a bank account may get frozen—there could be a mistake, you could experience an erroneous filing performed by somebody else, you could fail to return a response to the IRS, or even suffer from a postal error. These types of things can happen at any time, with or without any evil intent.
Besides the IRS, other government agencies also possess the ability to use similar strategies. Furthermore, with these actions, you cannot do much about retaliation in court. This type of bank account issue can occur at any time.
Theoretically, you do have legal ways to handle frozen bank accounts and seizures. However, this action requires a lawyer. Thus, if you find that the courts have frozen your bank account and you have no other avenue for money, you would not be in the best position to hire one. So, one of the first things you can do when you know how to protect your assets is to set up an international LLC (discussed below). Then use it to open an offshore bank account.
That is one way to buy a little time for yourself; to invest in a foreign bank or stock brokerage account. Possessing this type of account can help ensure you have money in case the courts freeze your U.S. accounts. Note, however, that foreign bank accounts are not necessarily free from seizure. The good news is that a light-speed seizure of a foreign bank account is not likely. This can give you tremendous peace of mind . A U.S. seizure of a foreign bank account means the foreign government needs to second guess its legal system, something it is not likely to do unless there is an emergency, such as terrorism or illegal money laundering.
Thus, in the case of a U.S. bank account freeze, your foreign bank account money still buys you enough time to have a cushion and a plan. Therefore, it is in your best interest to establish one.
One inexpensive ticket to some asset protection is to set up a limited liability company (LLC) in a foreign country. To start your company, you hire an experienced organization (such as this one). We can file your company into existence through the filing of specified documents in your chosen county. You can be both the LLC’s manager and its LLC’s owner, allowing you to adopt and approve into the company’s operating agreement, which will help you and any other members to manage the company.
Once you complete these actions you can then act as the LLC’s manager. With your company documentation, and application and due diligence, you can open an offshore bank account under the LLC. From there on out, you have freedom to transfer cash and investments. As the company’s manager along with a properly drafted operating agreement, you make the company’s investment decisions.
Using this type of LLC strategy, you can keep some of your assets in an account outside of the U.S., making those assets more difficult to be seized, frozen, or intervened with.
An extra bonus is that a foreign LLC also leaves you with a wider option of investment choices than you would have had just stayed in the US.
You might think that a foreign LLC may simply offer you a wider range in your financial portfolio. However, it offers far more than this to investors. One major benefit of a foreign business is that it exists apart from whatever is happening in the U.S. This factor means that you may be able to stay safe from any U.S. economic problems after you have started your LLC.
Furthermore, if you develop this type of business based on your personal efforts, then it’s a far less likely target in a lawsuit. As long as the foreign LLC is setup correctly, the business can exist outside the range of the U.S.’s financial control. This type of setup makes the business far less likely to be fished out like a prize in a lawsuit.
Some people who own businesses in the U.S may work with foreign businesses already. If this is the case, you have the option to move those non-U.S. activities to a foreign LLC, which can help protect some aspects of your U.S. based business.
Forming an international trust is quite possibly the most protective action you can take for yourself, your family, and anybody who inherits your assets. An international trust may costs a bit more, but the costs are typically quite reasonable considering the security this legal too can provide you.
The money is most certainly worth it because in return for the cost you wind up receiving a large amount of protection against predatory lawsuits, capital controls, or seizures. The trust also offers the added benefit of putting your assets into an area that may help you with your inheritance tax planning and estate planning.
One thing you do need to remember is that it is a large step for anybody to put their assets under the control of a trust. Therefore, you need to make sure you do your research, and understand how the trust works as well as what it can do for you.
An international trust that protects your assets will be irrevocable. This concept means that you cannot, as the settlor, directly make changes once you have set up and finalized the trust. This is good because if you could easily make changes, then the judge could force you to make changes against your will. International trusts are also discretionary, meaning that when you make requests for funds, the trustee can send them out to you when you need them. However, the trustee will not send funds when you are being ordered by a court to send funds to your legal opponent. So, such trusts put you in a position of strength. They provide tremendous peace of mind when a creditor is barking at your heels.
If you decide, instead, that you do not want to give up management of your assets, you can limit the trust to owning your LLC. Therefore, the LLC will hold the investments and you will manage the LLC, as long as you decide it is in your best interest to remain as manager of the LLC. When the “bad thing” happens and you need the trustee to step in as LLC manager in order to protect you, that powerful option is at your disposal.
Therefore, you have a few options here with what you decide to do with an international trust. It is perhaps your best bet at protecting your assets and keeping your wealth safe.
With these ideas and approaches available to assist you with your asset planning, you should be able to find your way through the asset management portal. The best thing to remember is that it is best to plan ahead and secure your assets before legal action. Considering one or a combination of a few of these steps should assist you with your asset management goals. With the ideas from this research, you should have the tools you need to plan ahead and make the next step toward asset protection.
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