Your Asset Protection Plan

Every Asset Protection plan is designed to meet the objectives of aparticular client. An Asset Protection Plan repositions exposed assets to aprotected position. The client determines the degree of protection desired for each asset, from moderate to absolute. Some assets don’t need to be repositioned because they are already well protected, such as registered retirement plans. Some assets are exposed and not repositioned because they are not significant.
The client decides the degree of protection desired, from moderate to absolute. Moderate plans change corporations into LLCs,w Placing assets in separate entities, relocating entities into selected legal jurisdictions, and transferring assets held in individual names into LLCs. Strong or absolute plans involve the use of one or more trusts in out-of-state or offshore jurisdictions combined with LLCs registered in onshore and offshore jurisdictions.

Have A Lawsuit?

It's never too late to implement an Asset Protection plan

Many asset protection lawyers will tell you that you can’t use Asset Protection once alawsuit is filed or acreditor has made aclaim. They are concerned with statutes that say if you make transfers that leave you insolvent and unable to pay your creditors or claimants, your recent transfers can be reversed. Our lawyers say there is nothing in the fraudulent transfer or conveyance statutes about when you can transfer assets. Lawmakers could have said no asset transfers within anumber of days, months, or years, but they didn’t. You have aright to legally protect your assets without regard to how your actions as viewed.

Even when acreditor is about to seize your property, an asset protection plan can protect selected assets. Rather than allow acreditor to pick and
choose which of your assets to seize, your plan can determine which assets to protect and which assets to leave exposed. It is NEVER TO LATE to implement your Asset Protection plan.

Both offshore and onshore t rusts are effect ive tools and should be at the center of most asset protection plans. Before explaining the difference between an offshore and onshore trust it’s necessary to know that the physical location of assets transferred into atrust, whether an onshore or offshore trust, does not change.
Onshore trusts have the advantages of being less expensive, ashort statute of limitations on fraudulent conveyance, allow afriend to serve as the trustee, fewer tax forms, and the trust purpose can be explained to save taxes and to have atrusted friend (trustee) to look after your children and grandchildren’s education and medical needs. The disadvantages are less legal protection and the risk ajudge invalidates the trust and distributes your assets to creditors.
The difference between an asset protection trust and almost all other trusts is that an asset protection trust allows aTrustor (the party contributing assets to aTrust) to also be the Beneficiary (the party receiving the assets or asset earnings). Any Trust that allows the Trustor to also be the Beneficiary is An Asset Protection trust.

In the US, 12 states have enacted trust laws to create Asset Protection Trusts. There is agreat deal of difference in the amount of asset protection provided between these 12 states.

All states have a“statute of limitation” that determines how far back in time acreditor can go to void atransfer and clawback the asset or their cash value if atransfer occurred at less than its value. Most states have astatute of limitations on asset transfers of between 4and 5years. That means that creditors have up to 5years to claw back assets if transferred at less than their value.

The 15 states that have passed statutes that allow Asset Protection Trusts have reduced their statute of limitations to between 2and 3years. The State of Nevada is the exception in that Nevada has reduced its statute of limitations on transfers for less than value to as short as 6 months if the asset protection trust is properly drafted. The 6month statute of limitations only applies to assets that are transferred into aNevada Asset Protection Trust. This 6month limitation has resulted in Nevada being the leading state for Asset Protection Trusts.
Asset protection is the process of redeploying your assets from an exposed position to a protected position. It is astrategy for guarding individual and business assets against claims of creditors, lawsuits, and regulators. Asset protection methods can prevent, hinder, or limit creditors’ access to valuable assets while remaining within the law.

Asset protection can insulate assets and keep them free of claims without hiding assets or misrepresenting facts. Agood plan will avoid fraudulent transfers and concealment. An effective protection tool is ajointly-held asset, called “tenants by entirely” where a creditor is prevented from infringing on the property rights of athird party.
The most powerful method available to protect assets is to use aTrust. Trusts have been used throughout the ages to protect assets and to assure that the benefits of ownership go to the trust beneficiaries. Asset protection trusts are unique because they allow the person who contributes the assets to atrust to also be a beneficiary of the trust.

Fifteen states have enacted asset protection trust statutes. Aperson can choose any of the 12 states that have asset protection statutes without needing to reside in the state selected. There are 36 countries around the world that have passed asset protection statutes. None of these countries require the trust contributor or beneficiaries to reside in their country.

When an asset is transferred to an Asset Protection Trust, the title or ownership of the asset is transferred. Both the title of an asset and the asset itself can be transferred to aTrust. There is no requirement to transfer the asset itself. If aRolls Royce, located in California, was transferred to aNew York Asset Protection Trust, there is no need to move the car to New York.

An asset protection trust established under Deleware law can own real estate and other assets in several states. Just as aDeleware corporation can own real estate and other assets several states. An asset protection trust established under Cayman Islands law can own real estate and other assets in any state or country in the world, without having to transfer any assets to their island.

Many people rule out using an offshore trust because they would not send their assets to some island in the Caribbean for safekeeping. Add to this misconception is that few US lawyers have ever established an offshore trust. This is because US citizens pay taxes on their worldwide income and an offshore trust is no benefit to their clients.

Understanding that titles and ownership are transferred and not the underlying asset, allows a greater choice in selecting ajurisdiction for their Trust.

The reason for selecting one state over another or one country over another is to select a jurisdiction with THE MOST ADVANTAGES LAWS available to protect the title of assets. There is no “one won best jurisdiction” to select because it depends upon the types of assets being protected, existing or pending litigation, the aggressiveness of claimants.

In order to form an Asset Protection Trust, ajurisdiction must be selected. The laws and regulations of the jurisdiction selected will govern the trust. In addition to asset protection regulations, the debtor-creditor laws of ajurisdiction play alarge part in selecting where to establish atrust.

Offshore Trusts have the advantage of providing degrees of legal protection from strong to absolute, no recognition of US judgments or court orders, bonded trustees, and trust protectors. Foreign jurisdictions forbid contingent fees lawyers and require the losers to pay. One jurisdiction requires aplaintiff to put up acash deposit of 50% of their claim. The standard of proof aplaintiff must meet is beyond the shadow of adoubt which means that if 11 or 12 jurors agree with the plaintiff, the plaintiff loses his deposit. The disadvantages are the higher costs of forming the trust, of an LLC to manage the assets and the cost of acorporate trustee. They have alonger statute of limitations, and are not viewed as proving for children and grandchildren.
Assuming that assets are in an exposed position and an asset protection trust should be used the following two factors influence whether the trust should be onshore or offshore.

Choose an Onshore Trust if you are not in litigation and believe that aclaim or lawsuit will not be filed or made against you in the next 6months. Establish your trust in Nevada because of its 6month statute of limitations on fraudulent transfers. Once 6months have passed since you transferred your assets into your trust and no litigation or claims brought it will be very difficult for acreditor to reach any asset in transferred into your trust.

Choose an Offshore Trust if you are in litigation now or believe aclaim or lawsuit will be filed against you within 6to 9months. Even if you face litigation ayear away you should choose offshore. If you choose aNevada trust and passed the 6month statute you may spend substantial legal fees fighting to preserve the statute. If creditors are expected to be aggressive you can select an offshore jurisdiction that has never allowed one of their trusts to be penetrated.

Before making any decisions relative to your assets you should seek advice from an expert on asset protection. You should find out if any of your assets are held in an exposed position and if they are, what are your options or steps you can take to protect them. After you have this information you can weigh your options and decide on acourse of action.
Real estate can be protected in jointly held property. Alegal right to awhole piece of property and not asubdivision can block acreditor. Acreditor who has aclaim against one owner cannot assert aclaim against another owner. Putting ahome in the name of an heir while the owner continues to reside in the home can be defended as estate planning to avoid probate. Financial accounts can be redomiciled into offshore banks to prevent attachment.

The simple conversion from acorporation into an LLC could prevent acreditor from seizing assets or foreclosure. The LLC can be further protected by establishing the LLC in adifferent legal jurisdiction. This requires acreditor to engage alawyer licensed in the state where the new LLC has been establ ished.
Atrust is formed when the founder irrevocably transfers selected assets to atrustee. The trustee now holds the title to the assets, not the former owner. If at the conclusion of the asset transfer, the contributor remains solvent and has kept sufficient assets to pay his debts, then no creditor has aright to pursue the assets that were transferred to the trust.

Forming atrust may displease creditors but they have no say in the matter. Without a Trust, creditors can pursue whatever asset they desire. Creditor targets are ofter real estate like ahouse or company office, that can’t be moved. Property owned by a Trust is untouchable. Nobody needs asset protection for gold coins or bars. So put your real estate into the trust and keep your gold to pass the test of having sufficient assets.
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2700 E Sunset Road, Suite 13B, Las Vegas, Nevada 89120
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Contact Information
2700 E Sunset Road, Suite 13B, Las Vegas, Nevada 89120
Mon - Fri: 8.00 am - 7.00 pm
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