What is a Safety Valve Trust

Asset Protection Trusts generally refer to trusts created under specific and favorable laws-usually in an offshore jurisdiction- encouraging individuals to protect their assets from potential liability from future claims. A Safety Valve Trust allows assets to remain in the U.S while obtaining the benefits of the strongest asset protection laws.

Safety Valve Trusts

The type of trust which is most popular with our clients is a trust protected by very strong overseas asset protection laws but the assets themselves are managed by the client and remain in the U.S. This structure provides the best of the offshore world together with convenient management and control. Keeping financial accounts and other assets in the U. S, under local control allows clients to maintain the convenience of their current accounts without the involvement of offshore trustees or advisors. It also avoids time consuming and expensive federal filing requirements. For additional asset protection the client retains the option to transfer funds to an overseas account established in the trust, at any time. This is known as the Safety Valve Feature and is popular in both offshore and domestic trusts.

Asset Protection Trusts-Safety Valve Features

  • Assets in the trust are protected by the most favorable asset protection laws;:
  • Maximize leverage by forcing legal adversary to litigate in a string of unfriendly foreign jurisdictions;
  • All assets are managed by the client:
  • Accounts and property remain in the U.S;
  • The trust is treated for tax purposes as a U.S domestic trust and is not subject to federal filing requirements:
  • The trust can provide estate planning benefits of passing property to survivors and avoiding probate
  • Client retains the option to strategically transfer funds to an overseas account established in the trust, at any time.
  • The Safety Valve Feature is popular in both offshore and domestic trusts.

We have a detailed discussion of Asset Protection Trusts including Safety Valve and other key features of Offshore and Domestic Trusts.


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