Overview

A variety of sophisticated features can be added to the strategies we have discussed by taking advantage of laws designed to encourage asset protection and privacy goals. In this section, we will discuss a popular planning option known as the Asset Protection Trust (APT) or the Offshore Trust, and show you the opportunities for enhancing the structure of your overall plan.

A recent report by the U.S. Department of the Treasury stated that in response to concerns about litigation the market for Offshore Trusts are "exploding." The Treasury Department estimates that assets worth "tens of billions of dollars" are currently in these types of trusts with the number and amount growing rapidly each year. An article in the American Bar Association Journal stated, ironically, that lawyers are seeking protection from the hazards of their profession by setting up Offshore Trusts for themselves. As one attorney quoted in the article put it, "I don’t want someone doing to me what I do to them all day in court."

The reason for the popularity of this technique is that it acts as an ultimate safety valve—providing an additional layer of protection for plans designed to avoid frivolous "deep pocket" litigation. Many individuals, wary of the potential for abusive lawsuits and frustrated by widespread violations of personal privacy, view the Offshore Trust as an important component of a sound financial plan.