Asset Protection Trusts
Asset Protection Trusts are a great tool in the right hands and for the right reason. The use of an International Trust can be an advantageous legal tool to secure and protect assets such as real estate, bank accounts, company assets, annuities, dividends, stock portfolios, furniture, artwork, precious jewels, and estate valuables.
Asset Protection Trusts, also known as, Foreign/Offshore Asset Protection Trust have evolved from Common Law to protect the assets of debtors from the courts by removing legal ownership from the debtor, while the debtor maintains control and beneficial enjoyment.
The Basic Concept of Offshore Trusts
Asset Protection Trusts are known also known as Foreign Asset Protection Trusts, (FAPTs), or Offshore Asset Protection Trusts (OAPTs). In any event, an Offshore Asset Protection Trust is a basic trust with special provisions designed to protect the asset being held. What it is not, is a tax shelter. The US government makes it very clear that all its citizens must report all worldwide income and comply with all tax demand.
Most other governments make similar stipulations as trends favor the protection and security of all assets, corporately, personally and governmentally. In a post 9-11 world, the protection and movement of assets are still legal and entirely possible; reporting has only become more stringent.
In the 1980’s a new era of “off shoring” began when some island nations offered themselves as “tax havens” where business people (especially those in the U.S.) could divert their assets to FAPTs to avoid taxation. Changes in the U.S. tax code and defeats in court ended this roaring tax evading epoch in US history.
Protection from Creditors
An FAPT is an offshore trust formed in an offshore jurisdiction that must adhere to specific trust and procedural laws designed to thwart creditors of trust settlors. The laws result from business decisions by the jurisdiction. These laws are created to attract trust business and trust assets.
Asset Protection Trusts are nothing new. Municipalities and countries have offered them for centuries in shielding assets and income from creditors. Allowing creditors to invade trust assets destroys the offshore business in the country of jurisdiction. In essence, the FAPT jurisdiction will not recognize U.S. judgments, and the courts of the jurisdiction are predisposed in protecting trust assets from creditors.
When these new trust statutes came into being, many lawyers claimed that judges in the U.S. would be unable to find trust settlors in contempt for failure to obey an order to repatriate their assets. The concept is that if creditors want to get the assets, they would have to take their fight to the courts in an offshore asset protection jurisdiction, only to find, for political and legal reasons, no asset protection trust would be broken.
Seeing success, other small countries having offshore jurisdictions quickly followed suit. Thus began the competition among these small countries and island nations of who could enact the most debtor friendly laws to allow FAPTs to flourish.
How does a Trust protect me?
The truth is that a trust must be properly implemented to protect you. A trust takes advantage of the jurisdictional laws. When you put your assets into a FAPT, it will keep creditors from retrieving your assets directly from the trust. However, the creditor can retrieve the assets indirectly if he is able to convince the judge that you can retrieve the assets yourself.
In order to avoid any Fraudulent Conveyance or Contempt of Court charges you must be protecting your assets and not willingly avoiding creditors. This is why you must enact your FAPT when the seas are calm.
The Advantage of International Trusts
In a properly constructed FAPT the asset remains in place for the beneficial enjoyment of the settlor.
The Disadvantage of InternationalTrusts
Timing – you must have good timing. If you wait for the financial seas to swell with duress, it may be too late to invoke a FAPT.
Make sure your planner discusses all of the aspects regarding FAPTs and OAPTs.
You most likely will have more reporting requirments
OFFSHORE ASSET PROTECTION
- Asset Protection Tax Summaries Italy
- Offshore Cayman Islands
- Asset Protection Tax Summaries Ecuador
- Asset Protection Nsa Spying
- Asset Protection Tax Summaries France
- Offshore Pensions And Taxes
- IRS Abusive Trusts
- Panama Region
- Tax Avoidance Vehicles
- Asset Protection Tax Summaries Honduras
- Asset Protection Guernsey Taxes
- Asset Protection Panama Foundations
- Asset Protection Identity Theft
- Offshore And Alternative Investments
- Offhshore Banking Privacy
- Asset Protection Privacy
- Irrevocable Life Insurance Trust
- Bahamas Information
- Asset Protection Expatriation
- Asset Protection Tax Summaries Panama1
- Asset Protection Taxing Expats
- Asset Protection Taxing Foreign Stock
- Asset Protection Flat Tax For Puerto Rico
- Asset Protection Location Of Your Company
- Asset Protection Caribbean Tax Havens
- Asset Protection Renunciation
- Asset Protection Offshore Definition
- Asset Protection Panama
- Family Limited Partnerships Tax
- Boats Asset Protection
- Asset Protection Tax Summaries Ireland
- Taxation Foreign Corporations
- Asset Protection Tax Summaries Mexico
- Asset Protection Offshore Liechtenstein
- Private Annuity Ruling Irs
- Asset Protection Hong Kong
- ASSETPROTECTION TRUSTS
- Asset Protection Faq
- Intentionally Defective Grantor Trust
- Panama Canal Zone
- Asset Protection Laundering
- Going Offshore
- Offshore Asset Protection
- Dynasty Trust The Basics
- Offshore Asset Protection Planning
- Secret Bank Accounts
- Asset Protection Police
- Asset Protection Guernsey
- Asset Protection Second Passport
- Asset Protection Tax Summaries Nicaragua
- Asset Protection Scam Trusts
- Nevis Offshore Financial Center
- Asset Protection Using Offshore Trusts
- Probate And Revocable Trusts
- Asset Protection Lawsuit Prevention
- Poetic Injustice In The Pearl River Delta
- Offshore Financial Centers Ireland
- Panama Comfort Zone
- Isle Of Man No Tax 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.