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Why The Jurisdiction Doesn't Matter

By Rob Lambert - Email Editor

Date : April 27, 2006

Often the first question out of the mouth of a prospective new client is: “What jurisdiction should I use?”

Most prospective clients are confounded when I say: “It doesn't matter.” I always say that the key issue is to get a solid and affordable Trust Company in any jurisdiction that recognizes Trusts. (Note, this is normally only countries modeled on the English system.)

WHY?

Simple. Remember the second rule of Asset Protection: NO COUNTRY IN THE WORLD AUTOMATICALLY RECOGNIZES U.S. JUDGMENTS. In all countries, a judgment in your State will have to be relitigated. In addition, in many countries, your opponent will have to actually post a bond to pay your legal fees if he or she loses. It is sometimes even worse of a problem for them because a creditor will often have to search far and wide to find a lawyer who will take the case. Many will have a conflict, and many more will not want to take on a case attacking any type of Asset Protection Trust (remember, these Trusts are a major business in many of these countries.)

This may irritate many U.S. judges, and will certainly irritate the lawyers for any creditor. It will irritate them further when they quickly find out that contingent fee agreements are considered unethical in most of the countries of the world. Simply stated, your creditors are forced to both HIRE and PAY a lawyer to attack you; AND, they are often required to post a cash bond for your fees, in which the bond is forfeited if they lose.

The above may cause some serious upset for the lawyers attacking you; however, that is just the beginning. If you follow the Kinetic Asset Protection Trust model, the money will NOT be in the same jurisdiction as the Trust Company. For example, if your trustee is in Belize, your money will be in some other country (or many other countries) such as Switzerland, Hong Kong, England, Lichtenstein or Bermuda. It doesn't really matter where the money is as long as it is not in the same country where the Trust Company is situated (one of the key rules), and the money is in a Fortune 500 level bank (never go with boutique banks).

Well, the issues in the above two paragraphs may cause some serious bowel trouble for your creditors; however, that is only the beginning. The real reason it really doesn't matter where the Trust Company is located because your Kinetic Plan will be designed to change trustees if trouble arises. This takes ten minutes; and, it also changes the jurisdiction. The protector in consultation with the trustee will normally engineer the resignation of the initial trustee in favor of a trustee in a different country. What really causes trouble is that the creditor will normally not know about this until the creditor has finished his litigation in the situs of the original trustee. This litigation will also normally be “ in camera ” (meaning not reported) and will be confidential. In short, the creditor may fight two years only to find out that the Trust and trustee are long gone.

So, chasing a trustee and money is often the equivalent to chasing an endless daisy chain. The trustees change ( e.g. the jurisdiction) and so does the location of funds.

Here's the bottom line: It takes a dollar to collect a penny.

I have been through these fights many times. The Trusts have to be carefully structured, and you need to be careful that no U.S. person has any power to disenfranchise a U.S. judge. The Trust should be “old and cold,” and the debtor should have retained plenty of money to pay all his reasonably anticipated debts at the time that the Trust was established. Many will argue that a self-settled Asset Protection Trust will not work in the USA. This is correct; however, it works in the rest of the world, and you (or more precisely your protector and foreign trustee) get to choose the battle ground. You do risk going to jail for contempt if you retain power to cause the money to be delivered to your creditor and refuse to do so; however, a properly structured Kinetic Asset Protection Trust will not allow you this power. I will soon do a newsletter on “Criminal Contempt” that deals with the issues you must deal with to avoid going to jail for contempt if you have a Trust and have to go to war with a creditor. If you did things correctly when the financial seas were calm, you will be fine. WHY? Simple: THERE IS NOTHING WRONG WITH PROTECTING YOUR HARD EARNED ASSETS. A Kinetic Asset Protection Trust is no different than a simple corporation on steroids. It is designed to protect the person who formed the entity from being hosed by our out-of-control legal system.

WHEW. That was a lot to say in a short newsletter.

I am interested in hearing from people who would like a 10-part, 10-hour course on Asset Protection. I would propose to do this one afternoon a week for ten weeks…say, every Wednesday at 3 p.m EST, I would charge $500 per person for the 10-hour course and limit it to 25 people. By the time you are done, you will know all of the basics and have lots of war stories. If you are interested, please email us and let us know, or click here . If there is sufficient interest, I will do it.

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