How You Can Use Offshore Asset Protection Strategies to Make Sure Your Assets are Safe No Matter What Happens
Offshore asset protection can be much misunderstood. It’s often associated with crime, money laundering, and secret bank accounts. Often people don’t realise that the main users of offshore asset protection strategies are hard-working entrepreneurs, doctors, lawyers, and other professionals who want to make sure their assets remain safe in what’s becoming an ever more litigious society.
Litigation is a fact of life nowadays. All of us in business have been sued at one time or another. Lawsuits can be initiated by ex-employees, business partners, or spouses, amongst a host of other potential litigants. If you’re a medical professional you could be sued by a patient. Lawyers are often sued by clients.
Tax laws are constantly changing in all the large western countries. New taxes are constantly proposed and likely to be needed to pay for the vast public expenditure during the pandemic. Wealth taxes have been proposed in several countries.
Governments are the ultimate parasites and they can often grab your money and freeze your assets first and ask questions later. There are multiple government agencies that have the ability to freeze your bank accounts and your assets.
Can you imagine waking up one day to discover that you can’t use your bank account? Most people never think about it until it’s too late. If you wanted to avoid that kind of scenario what can you do? What does an iron-clad asset protection structure look like?
1. Own Nothing, Control Everything
Firstly you want to have an offshore asset protection structure that is not legally owned by you. As Nelson Rockefeller said, “Own nothing, control everything”.
That means that you’ll want to have a foundation or a trust at the top of your asset protection pyramid.
You probably won’t want to carry out day-to-day operations through a trust so below that you’d have an offshore company. The jurisdiction would depend on your particular situation.
2. Use Offshore Companies
Offshore Companies are a crucial ingredient of a successful offshore asset protection structure.
The Company would be in a different jurisdiction to the trust. If you chose to form a Company in The Cook Islands, for example, it would be impossible to seize any assets it owned without going to court in The Cook Islands. That would, in itself, be enough to put off all but the most determined pursuers.
Your offshore Company could own various assets around the world. For example, it could own property, bank accounts precious metals, and gold around the world.
Your creditors would not even know these assets existed, never mind be able to seize them.
3. Keep No Significant Assets in Your Home Country
To make an absolutely bullet=proof offshore asset protection structure it’s essential to ensure that you don’t keep significant assets in your home country. Obvious valuable assets such as homes and businesses can be loaded with debt from your own offshore asset protection setup. For example, your offshore company can own a mortgage on your home, leaving no equity for any creditor to touch. Your business can pledge its key assets to part of your offshore asset protection structure too so that no value is left for any creditor to seize.
Make sure that your car is leased. Follow the same strategy for any visible assets. Keep only enough money to cover a couple of months’ expenses in your local bank account.
Keep any big stashes overseas in the name of your company or trust.
Have precious metal stored in a non-bank vault in a different country. Owned by your trust, of course.
4. Have an Overseas Bolthole
If you’re able to put all these steps in place you have made yourself virtually immune from having your assets seized by a third party.
5. Get Second Passports and Residencies
A second passport is another key tool in your freedom arsenal. It ensures that you’re able to travel when you want. The fact is that you don’t own your passport, your government does. They can cancel it at any time. Even in the last 2 years millions of people have been banned from travelling by their own countries. British citizens were banned from foreign travel. Australia banned its citizens from leaving the country too. Even Australians living overseas were told they may not be allowed to leave again if they returned to Australia.
Other European nations banned their citizens from leaving. Anyone having a passport from a different country wasn’t affected by this. A second residency is simply the legal right to stay in another country. If you choose the right country it can be a stepping stone to a second passport. It ensures that you can legally enter the country where that residence is. If you own a second home in that country it’s essential to have the right to enter that country whenever you want.
6. Plan Everything Carefully Well Before There are any Problems on the Horizon
Detailed planning is needed to put your asset protection structures in place. They must be planned and implemented years before any threat exists. If you don’t leave enough time between establishing a structure and a judgment against you it’s possible that any asset protection structure can be reversed. There are a number of detailed steps that have to be worked through to ensure that you do not legally own the assets that are transferred to an asset protection trust. At the same time, it’s necessary to ensure that you have complete control of everything that happens.
7. Have the Right Mindset
One often-overlooked strategy in planning your offshore asset protection set-up is mindset. When you have put everything in place you must have the mindset that if things get bad you’re prepared to walk away and go to your bolthole. Whether that’s short-term or long-term. If a crisis is brewing, either for you personally or something wider concerning your whole country you must be prepared to act fast and walk away. You’ll be in a much better position than most with the preparations you’ve made. Make sure you’re mentally prepared to take advantage of establishing your perfect offshore asset protection plan.