Asset Protection Trusts
It is important to define this trust vehicle as it has many aliases. As you surf around to gain knowledge about protecting your assets you will run across acronyms such as OAPT's, APT's, FAPT's, or IAPT's. You will also see the actual names: Offshore Asset Protection Trust, Asset Protection Trust, Foreign Asset Protection Trust, International Asset Protection Trusts, and various other names. Each type of trust listed can all be put into the definition below.
What is an Asset Protection Trust?
An asset protection trust is any trust utilized to insulate assets from creditor attack. An asset protection trust is normally established in an offshore jurisdiction, although the assets will more often than not remain in the United States under the indirect control of the person establishing the trust (the "settlor"). These trusts are normally structured so that they are irrevocable for a term of years so that the settlor is not a current beneficiary. Even though they are "foreign trusts" we normally structure them so that they are treated as domestic grantor trusts for tax purposes. With a properly drafted and timely settled trust, the creditors of the settlor cannot reach the assets of the trust. An asset protection trust is also normally structured so that the undistributed assets of the trust are returned to the settlor upon termination of the trust provided there is no current risk of creditor attack, thus permitting the settlor to regain complete control over the formerly protected assets.
An Asset Protection Trust is:
An effective tool to settle or discourage
A means to keep the ownership of assets absolutely confidential
An alternative to traditional pre-nuptial agreements
A hedge against potential exchange controls
A device to protect otherwise unprotectable pension assets
A means to give an insolvent debtor a fresh start
The preferred technique to avoid forced heirship laws (common in Europe)
A way to internationalize investment and hedge against governmental instability
How Asset Protection Works
There are literally hundreds of different techniques to protect different categories of assets. Some are appropriate for everybody and are based on common sense (e.g. not flashing your money around or never entering into a general partnership) and others are appropriate for wealthy or soon-to-be-wealthy people (e.g. foreign asset protection trusts). Asset protection techniques also vary depending on both the type and location of property.
All asset protection techniques have one thing in common: they each make it more difficult for a creditor to either find or take assets. By implementing a properly crafted asset protection plan (which may include an asset protection trust as well as a family limited partnership) an individual can legitimately put a significant portion of his assets out of the reach of judgment creditors and still retain substantial control over these protected assets. A properly implemented asset protection strategy reduces the size of the target the plaintiff's attorney is shooting for. Once the plaintiff's attorney is convinced that any judgment will be difficult or impossible to collect his motivation fades because he is unlikely to be paid for his work. The effect of asset protection planning is the destruction of the economic incentive to litigate.
ABOUT THE COMPANY
- Rob Lambert
- Asset Protection Calm
- Home Protection
- Family Trust
- ASSET PROTECTION TRUST
- Asset Protection Misconceptions
- Asset Protection News
- Offshore Investing
- Asset Protection Privacy
- Asset Protection Facts
- Author News
- Mission Statement
- Home Equity Acceleration Plan
- Asset Protection Strategy
- Asset Protection Trust Services
- Virtual Tour
- Author Newsletter
- Asset Protection Trust.02 12 13
- Asset Protection Consultation
- Contact Us
- About Our Firm
- Asset Protection Newsletters
- Panama Canal Zone
- Dynasty Trust The Basics
- Asset Protection Affliates
- Trustmakers Sitemap
- Panama Comfort Zone
- TrustMakers Forms Center
- TrustMakers Site Map
Learn more about protecting your assets with these articles:
If you are looking for the most important concepts in Asset Protection, this is where to start! If you need to talk intelligently about protecting your net worth or you are a professional this online training program is for you!
Get our Free Online Asset Protection Video Course.
Learn how to protect yourself like the pros!
Clear, concise and straight forward, this e-Book will help you make sound decisions with your business and personal assets..
This e-course will give you straight forward asset protection advice you can implement now. One of the best asset protection courses available! Includes 70+ video lessons, 3 Ebooks, and 6 example legal documents!
The key to a solid Asset Protection Plan is the Estate Plan. This downloadable estate organizer will help you keep track of important information about your assets and important legal documents all in one place.