Summary

You can take advantage of favorable laws in other countries to enhance the asset protection features of any plan.

One technique is to deposit funds in an overseas account in the name of an Offshore Trust. Investments are managed by the trust company with advice and direction from the Protector. This strategy can create excellent financial privacy and asset protection when the overseas account is located in a country with strict bank secrecy and confidentiality laws.

Individuals who do not wish to transfer property overseas—until it is necessary to do so—prefer to use the Offshore Trust as a safety valve. Property and liquid assets are held in domestic entities such as an LLC or FLP. At a later point, if additional protection is required, assets can be transferred to the overseas trust account to be held according to the terms of the trust agreement.

The Offshore Trust cannot be used to avoid taxes or to "hide" the proceeds of illegal or fraudulent activities. Properly structured, the Offshore Trust can be a powerful weapon to discourage frivolous lawsuits targeting "Deep Pocket" defendants and to protect against unforeseen liabilities arising out of a business or professional practice.