Using trusts for asset protection is a common practice among the wealthy. But it can be difficult to determine what type of trust offers more protection. Trusts within the United States are called domestic trusts, while trusts that operate outside of domestic jurisdiction are referred to as offshore trusts.
Trusts must abide by the regulations of the country they are in. Therefore, domestic trusts are subject to United States law which allows the US court system to uphold judgments against assets being protected by a trust. Furthermore, domestic trusts are limited with regards to tax planning. This raises the question: Are offshore trusts better? And, if so, what are the best countries for offshore trusts?
When deciding where to set up your trust, there are a variety of factors to consider such as legal protections of settlors and beneficiaries. The ease of transferring and depositing of cash assets is also an important factor. Additionally, consider whether the jurisdiction offers protection from foreign judgments and creditor claims.
Using offshore trusts to protect your assets allows you to choose favorable offshore jurisdictions that provide the level of protection you need. Offshore jurisdictions are exempt from following US laws, and often have regulations in place that support trust settlors and restrict creditors. Therefore, when using offshore asset protection, it may be more difficult for a creditor to successfully make a claim against asset transfers.
Access to Your Assets
In most cases, accessing assets in an offshore trust is easy. One of the main benefits of an offshore trust is the legal protection of the settlor from creditors. This ensures that you have full access to your assets and your creditors cannot jeopardize them. However, there are some risks of opening an offshore trust.
Depending on the circumstance and the management of the trust, settlors may be at risk of criminal tax evasion charges which can lead to more severe charges. To make sure that you reap the rewards of your offshore trust without running afoul of the law, invest in an attorney who specializes in risk mitigation and asset protection. Jeffrey M. Verdon high net worth protection attorney in California, will work to protect the assets you have worked to achieve.