While earning is important in life, trying to protect it for the future is equally important. Sadly, there are many risks encountered when trying to safeguard one’s assets. Putting in a savings account will not work for a high-net-worth individual who may have diverse sources of income and needs to protect it diligently. Minimizing the risks and threats is super important as well. One of the best ways to ensure this is to consider setting up an asset protection trust outside the jurisdiction of the USA.
One of the first things that you must know is the meaning of such a trust. It is important to know that this will be an irrevocable trust that cannot be altered at any time unless specified in the terms & conditions. Once you transfer your assets into the trust, they will no longer be a part of your estate. It is the trustee or the trust company that will manage the assets as deemed necessary. You, the owner, will not be linked with the assets in the trust thus making it easier for you to claim no responsibility.
You may opt for any of the following types of asset protection trusts or APTs
Domestic– Setting up this trust is advisable when you have a substantial number of assets along with huge liabilities. However, it is vital to know that these APTs are available in a few states today. However, they are easy to establish and operate although trusts come with a few risks.
Offshore– This is a trust that is established in a foreign land usually far away from your native country. Also known as an offshore trust, these are available in limited jurisdictions. The most popular and prominent offshore asset protection trusts are the Cook Islands, the Cayman Islands, and the Isle of Man. Setting up such an APT can be beneficial for you as it offers complete protection for your assets that remain inaccessible to the creditors. While this may seem like a wonderful opportunity for high-net-worth individuals, offshore trusts come with their share of cons too. You must know that the cost of establishing a foreign trust is considerably more than the domestic option. However, the cost is truly justified for the users who are happy to obtain multiple benefits namely:
- Protection of assets from Creditors & Lawsuits– Putting the significant assets into an offshore trust will deter a creditor from making claims on your wealth. There will be no lawsuits filed either. This will enable you to save your wealth, property, self-owned vehicles, and more. Besides, you will not have to worry about paying legal bills
- Avoiding Probate Procedure– You do not have to dread the long and complicated probate after your death. Instead, the trustee will make sure that the assets that you have in the trust are given to the beneficiaries immediately after your death
The high-value asset owners find the asset protection trust to be an invaluable tool. However, you must consider the types of APTs available and opt for one that meets the goals perfectly.
