OFFSHORE ASSET PROTECTION
Offshore Asset Protection for Bullet Proof Financial Security
Ask almost anyone in the world if asset protection is important, and you will get an
affirmative reply. Who doesn't care about the things that are valuable to them? If people didn't
care there wouldn't be an insurance industry, would there!
However, if you then ask what level of certainty there is that nothing can ever take away
these assets, you will undoubtedly uncover many doubts and worries.
Life Is Full of Uncertainties
Why is this? Because, as
everyone knows, life is full of uncertainties against which no one can insure. To do that we
would need a crystal ball that works! There are lots of things to worry about-natural disasters,
untimely illness or death, political unrest, and last but not least, litigation that can ruin you.
These concerns are real to every individual, and this book addresses the question of how to
protect your assets against them.
For the high income or high net worth individual, litigation is perhaps the likeliest and most
constant threat.
Who Gets Sued?
Examples of the types of individuals that regularly get sued:
- Professionals - engineers, lawyers, dentists, chiropractors;
- individuals or closely held businesses that own high-risk businesses;
- owners of real estate;
- celebrities, athletes, government officials;
- directors and officers of companies;
- international traders, or fiduciaries.
The United States is the most litigious country in the world, the number of lawsuits is
growing and the recoveries awarded by angry juries are too.1 There are estimates that over
50,000 lawsuits are filed per day in the US: this makes the risk of a lawsuit high.2
Being Sued Costs More than $100,000
To be sued, or even to advance a suit, the average cost is likely to be no less than $100,000,
and in many cases several times more. Can you afford this? If you are the defendant, and you sit
in an unappealing position in the eyes of the jury (i.e., you are successful and have a good income
or high net worth), there is a very good chance that the jury will award against you-as a vote
against the system perhaps, but it's your pocket book that will pay.
One jury verdict could ruin you.
Worse yet, if you are a high income or high net worth individual, there is a good chance that
someone will pursue you through an attorney working on a contingency basis. When the person
suing you doesn't have to pay for their attorney's time, because the attorney is willing to work for
a percentage of the final award against you, you are a sitting duck: the opposing counsel has
already sized you up, determined that you have assets that can be taken, and decided that the odds
of a jury or judge making an award against you are good.
You Are a Sitting Duck
How does the opposing counsel know so much about you? It's easy. An asset
search will produce a report of all of your assets and information on whether
you have a big insurance policy.3 On the other hand, if your pursuer
and his or her attorney find after an asset search that you don't have as many
assets as expected, or that your insurance is not as generous as they guessed,
their enthusiasm for chasing you may wane.
There are estimates that claims often settle for about 15 percent of the
original amount when it is discovered that the individual being pursued does not
have many assets or insurance to grab. Therefore, it makes sense to protect your
assets from these potential hungry pursuers to the maximum extent possible.
Asset Protection Commonly Used
In general, business routinely uses such protective devices as corporations,
limited liability partnerships, and the like. But these devices, while useful,
are not completely effective. If more can legitimately be done, why not do as
much as possible to protect yourself?4 Offshore asset protection
using Offshore Belize Asset Protection
Trusts, Private Foundations and Limited Liability Companies are the highest
protection and security you can achieve.
Removing wealth from obvious sight and reach is permissible if done in
advance of any known creditors and not done with the intent to defraud them.
Is Offshore Asset Protection Planning Ethical?
Asset protection planning is merely taking the tools that are provided and
using them to safeguard assets. Using such tools is just as legitimate as making
out a will or setting up a trust to protect your family.
As in any planning, however, the key is that it has to be done in time! "A
stitch in time saves nine" still applies in the modern world. Asset protection
planning is like doing your will: better do it now before there is a problem.
Once death arrives, it's too late. How easy is it to fall into the category of
needing asset protection planning? Anyone with a high income or high net worth,
or those on their way to success but operating in a high-risk or high-liability
business setting, should be protecting their assets. In addition, anyone in a
financial advisory position with such individuals may have a professional
responsibility to advise of potential risks and protection possibilities.
What Steps Can You Take to Protect Your Assets?
So, how do you decide who needs offshore asset protection? How do you do a
risk assessment? Where do you begin? First, let's look at the kinds of people
who are likely to need asset protection. Then we'll develop a risk assessment
approach that you can employ for yourself or for clients!
1 "Cover Your Assets," The Economist. (April 8, 1989).
2 Robert J. Mintz, Lawsuit Proof. (San Juan Capistrano, CA, LawTech
Publishing Co. Ltd., 1995): 1. Part II Chapter 1.A
3 "Endangered Assets? Try an Island Strongbox," Business Week. (August 24,
1992).
4 Protect Assets Before Lawsuit Arises, American Bar Association, January
1996. Everyone Needs Protection
Part 1: Offshore Asset Protection - ASSET PROTECTION MAIN PAGE
Part 2: Offshore Asset Protection - for Environmental Liability
Part 3: Offshore Asset Protection - for High Profile and Celebrity Individuals
Part 4: Offshore Asset Protection - for Officers and Directors
Part 5: Offshore Asset Protection - for Professionals
Part 6: Offshore Asset Protection - for Property Owners
