We sometimes come across clients who are under the false assumption that any program that has the term “offshore” attached to it, must automatically have something to do with illegal money laundering. That is not the case at all. An offshore asset protection trust is simply a well-established trust that consists of a trustee, settler and beneficiary. A trustee is in charge of managing the trust, and has the power to manage and control assets to ensure that the beneficiaries receive the full benefits of their asset protection program.
There is nothing illegal about it at all. However, when you entrust your asset protection planning to a fly-by-night operator or any one of the number of spammers operating on the Internet these days, you’re likely to find that your asset protection plan comes under IRS scrutiny. For instance, an offshore asset protection trust is not meant to be used for tax saving purposes. Sure, there are tax benefits that come during the normal course of asset protection, but these are not the reasons why you should establish a trust. Unfortunately, many people fall prey to spurious advice by scammers, and the result is unpleasant scrutiny by the IRS.
An asset protection trust is not meant to be used as a means of defrauding creditors. It is only a means of preserving your wealth. For an offshore trust to be completely successful and 100% legal, it must have been established before any legal action is taken against you. These are some of the basic legalities involved in asset protection, and if your advisor tells you to do otherwise, find yourself another asset protection attorney.
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