Why You Don’t Have an International Asset Protection Trust … Even Though You Should
The protection, safety, and tax advantages of an international asset protection trust gives you a nice list of benefits:
– Malicious Lawsuit Protection
– Arbitrary Asset Seizure Protection
– Protection from future restrictions on ownership of foreign currencies or gold
– An upgraded legal environment for planning your estate
– Access to foreign financial institutions and investment markets
– Income tax planning advantages you won’t get at home
– A path for the wealth of your family to eventually disappear completely from the US tax system
– Peace of mind from knowing you may fall back on assets that aren’t within the grasp of the government where you reside.
There is just no way possible to gain this many advantages except with an international asset protection trust.
So why don’t you have one set up already? Here are the top 10 reasons most people are not receiving the kind of protection they desire for their families or themselves.
Concern #1: “The Trustee May Be Dishonest and Try to Cheat Me.”
Not many Americans have experience dealing with international asset protection trust companies, and that is especially true of their lawyers. How does one trust the Trustee? There are really just two main ways to approach this concern.
The first solution is to take an airplane ride. Once you’ve identified a candidate for your business, purchase a plane ticket and make a visit. After a couple of meetings, your level of confidence will rise or fall.
The second solution is procedural. The Trustee has no need to actually touch the assets you want protected. Rather, your assets would be kept with a foreign bank or broker that you do trust, with you as the account’s active manager. Orders would come directly from you to the foreign bank or broker and you would therefore always know where your money is. The Trustee would remain in the background.
Concern #2: “How do I know the Trustee will do a good job?”
This concern also has a clear solution. A properly designed international asset protection trust, will have you (or another person of your choice) as the Trust Protector. As the Trust Protector you’ll always have the power to substitute the Trustee with a licensed trust company. This means you may take your business elsewhere anytime you like.
Concern #3: “I prefer to make my own investment decisions.”
Concern that the Trustee may handle your assets ineptly can easily be eliminated. The first approach would be to keep the money in a brokerage account that you manage. Keeping the money inside an LLC that your trust owns and that you are in charge of, is another way to make all the investment decisions.
Concern #4: “I’m concerned I’ll make trouble with the IRS if I create an international asset protection trust.”
The rules managing your international asset protection trust are simple and clear. So follow them.
For the rest of your life, all taxable income earned by the Trust needs to be included on your personal tax return. That’s the rules. Be sure your accountant knows what you’re up to, so he can prepare and file the simple reports required by the IRS. (We can show you tax-advantaged investment vehicles that will keep your international asset protection trust taxable income low.)
Ask any accountant or tax attorney that works with international holdings if an international asset protection trust will bring trouble from the IRS and their answer will always be “No. However, be sure to file all required reports.” As long as you follow the reporting rules and pay your taxes, there’s nothing for the IRS to make trouble with.
Concern #5: “What if the judge orders me to repatriate money from my international asset protection trust to pay a judgment. I don’t want to get locked up.”
A correctly structured international asset protection trust allows you to obey any court order you may receive… without endangering the international asset protection trust fund. If you lose a big lawsuit, be sure to make every effort to follow the orders of the court, following your attorney’s advice in doing so. Your efforts to loot your own international asset protection trust, if that’s what the court demands, will most likely be unsuccessful, because you won’t have the power to request that the Trustee should disburse money to you.
If the Trustee suspects or knows that you are under a court order, the Trustee will have a duty to not send you any unusually large amounts that could be taken by a creditor. Your international asset protection trust fund will be safe and sound.
You may be concerned you will receive a contempt of court for refusing to obey a court order or for failing to do everything reasonable to obey the order. But you will not be found in contempt for failure to do the impossible (unless you developed the impossibility after the court case had begun).
Your inability to touch your international asset protection trust to pay large judgments will protect you from frivolous litigation in another way: it greatly reduces the chance one will ever even begin a lawsuit against you. A serious litigator would see the international asset protection trust as an asset he wouldn’t be able to gain even if he might win in court.
Concern #6: “I heard about someone who had an international asset protection trust that was an arms dealer (or embezzler or money launderer). I don’t care to be a part of that sort of company.”
The last time you probably heard of someone with an international asset protection trust was when you were watching a mobster TV show or movie. Each jurisdiction suitable for a legal and lawful international asset protection trust has created “know your customer” guidelines that are enthusiastically enforced and that all legal and licensed trust companies are required to obey. In addition, each trust company must gain the knowledge of how its client gained possession of the property, money or other assets he’s transferring into his trust. Most trust companies in these jurisdictions do not want to risk the loss of their license due to the acceptance of tainted or illegal money or due to their lackadaisical following of the rules.
Part of your due diligence in setting up an international asset protection trust should include the selection of a jurisdiction and a trust company.
Concern #7: “Even if I knew I needed an international asset protection trust, I still wouldn’t know where to look.”
Welcome to the club. Most people don’t know where to look. Here is a simple way to help figure it out. The most important things to look for in a jurisdiction for an international asset protection trust are:
– Laws making it hard for future litigators or creditors to get into your trust
– English common law
– No inheritance or income tax on trusts
– A country with an honest government and political stability
– Freedom from dependence on the US government
Concern #8: “International asset protection trusts are too complicated.”
Whenever something is new it seems complicated until you receive a basic explanation of how it works. Here is the 1 minute version now.
1. As the Grantor of your international asset protection trust, you do two simple things: First, in a written document, you must tell the Trustee who the Beneficiaries are (probably you and any members of your family you wish to name). You may even add descendants who haven’t been born yet. You may add a charity or other non profit organization. You may add anyone; it really is up to you. The second thing you must do is to transfer LLC interests, property, money, or other assets to the Trustee to hold inside of your trust fund. You may add new money or assets to the trust fund whenever you want, which means you may start with something relatively small and then add to it as your comfort level increases. In order to protect you against future potential creditors and for tax reasons, your transfers are irrevocable (not able to be changed, reversed, or recovered; final.)—so be sure you understand very clearly what you are trying to accomplish before transferring assets into your new trust.
2. The Trustee has a legally enforceable responsibility to protect the international asset protection trust fund and to maintain it for the benefit of the named Beneficiaries according to the rules you set down when you opened and funded the trust. “Maintain” generally means sending you or other Beneficiaries a stipend. It can just as easily mean investing in business or paying off a debt or even paying medical bills in an emergency.
3. You will probably be named Protector of the trust. The Protector is in charge of advising the Trustee on exactly how it should fulfill its responsibilities; in other words, how and when each Beneficiary will receive their distribution. The Protector is endowed with the power to replace the Trustee with another if it is decided that doing so would help the trust do what you intended when you established the trust.The Protector is also endowed with the power to name a successor. In this way the Protector’s role may continue from one generation to the next.
4. Because the Protector’s powers are so important, he is protected by an “anti-duress” provision. The Protector’s ability to run the Trust actually get suspended should he be put under any duress such as a lawsuit or government agency. This is what keeps any outside person or agency from using the Protector to manipulate the trust.
You have just now taken the very first step in becoming an expert on international asset protection trusts, and all it took was 60 seconds.
Concern #9: “I’ve already spent the time and money to develop an estate plan. I don’t want to do it again.”
There is no need to start over to get the protection and safety of an international asset protection trust. All that is needed is the relocation of the plan to a different jurisdiction. All traditional estate-planning tools work smoothly and safely inside an international asset protection trust. In addition, by going international, you may achieve two distinct advantages that you would not have with an at home approach.
First, an international asset protection trust allows you to move assets out of your existing taxable estate while keeping them available for future income.
Second, an international asset protection trust is a permanent solution. When you die, the trust will become disconnected entirely from the American tax system. Comparatively, when you leave assets and money in the US, your US domiciled assets that you left for your family will continue to be subject to income and estate tax, year after year, generation after generation.
Concern #10: “An international asset protection trust is too expensive to establish and maintain. I want protection, but not at any price.”
Like all things, establishing an international asset protection trust may be inexpensive or expensive. This depends on how one goes about it. At the most, you could pay around $100,000. On the other hand, if you do a little homework and begin to understand the subject, establishing an international asset protection trust may cost less than $5,000.
Annual maintenance works similarly. You may pay 2% per annum or more to keep your international asset protection trust going or with some shopping, you can drop the annual costs to below 0.5% per annum, which is less than half of what you’d expect to pay on a basic mutual fund.
We can show you how to establish and maintain a lawful international asset protection trust in the most cost-efficient way. You’ll be surprised how inexpensive maximum safety can be.
If you have at least $250,000US in assets and are interested in finding out how to protect it, It starts with a phone call, a free consultation, to find out your point ‘A’ and where you want to go.