Using offshore accounts is a great option for asset protection. When managed properly, international asset protection provides several advantages:
- Protection from creditors and legal actions
- Increased yields
- Tax benefits
While international asset protection is a legal method of protecting your assets from being lost as a result of lawsuits, account freezes, or the lack of security with domestic accounts, it needs to be managed within legal limits. Therefore, it is very important to enlist the services of an estate planning attorney who is experienced when it comes to establishing offshore asset protection trusts.
How Much does International Protection Cost? This is a very important question for clients to ask their estate planning attorney. Often, there are large discrepancies between attorneys when it comes to the legal fees they charge for similar legal work. However, the majority of attorneys will tell you in advance how much they charge for these types of services.
In general, setup fees for an offshore asset-protection trust are going to be higher than they would be to create a domestic asset protection trust. But these trusts are usually one part of an overall comprehensive estate planning strategy which helps clients save on taxes, protect their personal and/or business assets from the threat of lawsuits while, at the same time, helping to protect their lifestyle and to maximize access to income.
The Cost of NOT Setting up an Offshore Asset Protection
Perhaps, a better question to ask with regard to the setup costs for an offshore asset protection trust is how much could it cost you if you don’t establish this type of trust, especially if your family or company has more than $10 million in assets that could be at risk.
The potential benefit of setting up an offshore assets protection trust, in many cases, will far outweigh the costs. For people with high liability risks, using offshore asset protection moves any legal battles that they may have with creditors to jurisdictions that are beyond the reach of federal and state civil courts in the U.S. In order to levy or garnish offshore trust assets, creditors would have to file and re-litigate in the foreign jurisdiction, which is not only impractical, but also costly.
Different jurisdictions have different tax laws as they apply to asset protection trusts. For example, in the Cayman Islands, there is no corporate or income tax imposed on money earned outside of its territory, including any money earned as a return on an investment such as dividends.
In offshore jurisdictions, privacy laws are of the utmost importance, making it easier for individuals and/or business owners to shield their assets.
The Sooner, the Better
Ours has become a very litigious society. On average, 40 million lawsuits are filed each year in the U.S. Depending on your level of wealth, international asset protection costs are far outweighed when compared to the cost of losing assets held in a domestic asset protection trust to a lawsuit or creditor judgement.
For more information on how an offshore trust really works and when to set up an offshore trust contact the Jeffrey M. Verdon Law Group with offices in Newport Beach and Redwood City.