Asset Protection Basics - Why Offshore?
(Reprinted from the MahanyLaw blog. Please visit our blog for many other informative articles and topics.)
Mention "offshore" when discussing asset protection and most people think secret Swiss bank accounts or vague fears of being seen on the evening news being lead into a court room by heavily armed IRS agents. Offshore asset protection, if done properly, is legal and highly effective.
Imagine being a highly successful surgeon. After years of hard work you are able to afford a beautiful home, have savings to put the kids through college and drive a nice sports car. One day, something happens... your teenage daughter gets in a car accident and someone is hurt. Suddenly the victim thinks he has hit the jackpot. The daughter of a wealthy surgeon!
Insurance can only protect you from so much (and having good insurance is one of the first steps in any comprehensive asset protection plan.) If your bank accounts are sitting in the local Wells Fargo branch, gold coins in a nearby bank safe deposit box and your home is in your own name, ambulance chasing lawyers will be lining up to take the case.
Don't think it could happen to you? Tens of thousands of people find themselves in exactly this predicament each year. Not enough insurance and frivolous claims or runaway jury awards. Last year I wrote about a multibillion-dollar employment discrimination award to a single person out of a superior court in Los Angeles County. Can anyone be that much a victim of discrimination? Does anyone carry that amount of insurance?
Now lets imagine this same scenario if your home is owned by a family trust, your bank accounts owned by an offshore trust with a foreign trustee and your gold or silver is in vault in Hong Kong. Yes, the victim of the accident will get something (as they should) but your life savings won't be wiped out.
Offshore strategies need not be complex. Nor are they expensive to construct. Foreign trusts and bank accounts are completely legal, but you do have to report them to the IRS.
Fees for domestic asset protection plans can be as little as $5,000 and offshore plans as little as $15,000. Almost all our work can be performed on a flat fee basis meaning no surprises. When compared to the amount you will save and the years of financial security it provides, the cost is minimal (our fees are also very competitive - feel free to compare our prices.)
If you choose to go the offshore route, be wary of prepackaged "asset protection trusts" hawked on the Internet. These one size fits all trusts frequently provide little or no protection. Every situation is different. These off-the-shelf packages frequently do not help you navigate the federal report of foreign bank and financial accounts (FBAR) requirements or other required tax filings.
We are unique in that we have both the asset protection and tax law knowledge within our firm. If you have an existing trust or have unreported offshore accounts, call us. We can help bring you into compliance or review your existing plans.
At MahanyLaw, we pride ourselves on listening to our clients needs and building asset protection plans and structures that maximize your financial safety. Attorney Brian Mahany has practiced law for over 25 years and represented clients across the United States. If you seek a quality, tailored product, contact Brian at 414.704.6731 or via email, brian@mahanylaw.com. Appointments available throughout the United States.