How is a foreign asset protection trust created?
An asset protection attorney from our firm will set up an offshore trust by transferring your assets into a limited partnership. By becoming a 1% shareholder in the partnership, you will maintain control, while the remaining 99% of the shares are moved into the foreign trust. While the assets are not required to leave the country unless or until they are threatened, an attorney may recommend you transfer them to an offshore trustee now, just to be on the safe side.
Benefits of a foreign asset protection trust
A lawsuit filed against you in this country that results in a judgment will have no impact in the country where your assets are held in a foreign trust. Any plaintiff who wanted to have the case heard in a foreign country would need to hire a local attorney and bring all of the witnesses to attend a hearing there, just to convince the court to accept jurisdiction. Needless to say, this is a strong deterrent.
Considerations when setting up an offshore asset protection trust
It is important to set up a foreign asset protection trust before someone files suit against you and before a lawsuit becomes imminent. Otherwise it would be considered a fraudulent transfer.
Creating a foreign asset protection trust will not affect the amount you owe in taxes. Income, estate, and gift taxes would still be paid as they are now, and you will need to disclose any foreign accounts, trusts, or assets on your tax return.
A foreign trust is not without risk, as a trustee from that country must be involved, and the laws regarding these trusts are subject to change at any time.
Why choose a foreign asset protection trust over a domestic one?
Domestic asset protection trusts, or DAPTs, offer the ease and familiarity of a local jurisdiction, but in order to gain protection from creditors one must give up control of these assets to a trustee. Domestic trusts will also remain within the jurisdictive reach of the United States, with the exception of certain creditors.
The advantages of a foreign asset protection trust (FAPT):
- The assets are held in a jurisdiction with more favorable laws, thereby making them less vulnerable to U.S. judgments.
- Because the trust is held by a foreign trustee, a U.S. court cannot or them to hand over the assets. While it may sound scarier to have your assets held in another country with a foreign trustee, you can retain some decision-making ability by including a document called a “Statement of Wishes.”
You have worked hard for your assets, but we live in a highly litigious society, which could put your assets at risk. If you are a high-net worth individual or someone whose profession puts them at higher risk for lawsuits, a foreign asset protection trust can keep at least some of these assets away from U.S. creditors.
Schedule a consultation with our experienced legal advisors at Dilendorf Law Firm to determine if a foreign asset protection trust makes sense as part of your overall wealth management strategy.
Summary
Service Type
Foreign Asset Protection Trusts
Provider Name
Dilendorf Law Firm,
60 Broad Street, 24th Floor,New York,New York-10004,
Telephone No.212.457.9797
Area
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Description
At Dilendorf Law Firm, we help steer our clients to the most sensible legal solutions for protecting assets that will shield them and their beneficiaries from potential tax burdens and litigation. The Foreign Asset Protection Trust is an option for people who are at higher risk for lawsuits, such as doctors, lawyers, architects, developers, and entrepreneurs.
