LayRoots

Asset Protection | Live More Carefree

Offshore Asset Protection

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The goal of asset protection

People call us interested in setting up an asset protection plan. Or they want to upgrade the plan they already have.

These people have done their research and have spent a lot of time worrying before calling us. They want to know whether this entity or that entity (like an offshore trust or LLC) will withstand the worst imaginable circumstances. This is understandable – you’ve already imagined these worst imaginable circumstances. You are sure that you will go straight from being served a lawsuit to this extreme. You want to get value for the cost of your plan.

What is this “worst imaginable circumstance” that people are imagining? You get sued, you lose the lawsuit, you get a judgement against you, and then a creditor attacks and tears down your asset protection structure. They threaten you with jail time because you won’t “give up the goods.” You are disgraced, your assets are in jeopardy, and you spent all that money on a plan for NOTHING!

[Read more…] about The goal of asset protection

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Asset Protection Metaphor #117

I do like a good metaphor. To be honest I like any metaphor I come up with. If I think it’s a winner, I’ll write it down with the intention of publishing a post or video about it. Sometimes those metaphor notes get buried in your storage unit. Today I uncovered one from back in 2017. I was thinking about how keeping my dog safe was kind of like keeping your money and other assets safe. Put your dog in the yard with the highest, sturdiest wall. Colin Ley is an asset protection attorney and the co-founder of LayRoots (along with with partner in life & business – Shreya Ley) Let’s talk about your asset protection strategy: book a free initial consult

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Nevis Multiform Foundation

A few months ago, a reader sent me a question: “What’s to stop a judge from forcing me to turn over my LLC?”

He was talking about a single member LLC. Single member LLCs have fewer protections from potential creditors and predatory attorneys.

I wrote more on the topic of turnover orders.

How can you avoid a judge forcing you to turnover your ownership interest in an LLC?

Easy…don’t own an LLC. Instead, be the beneficiary of an LLC.

The Nevis Multiform Foundation

Ok, you can’t be the beneficiary of an LLC. But you can be the beneficiary of an offshore foundation administered like an LLC.

Also, I’m not talking about a charitable foundation as is common in the USA. An offshore foundation is a different type of entity in other parts of the world.

These types of foundations don’t exist in the US.

Nevis Multiform Foundation

What is an offshore foundation?

An offshore foundation is a hybrid entity. It is a mix between a company and a trust. Like a company it is a separate legal entity and administered with a management board. An offshore foundation does not have owners or shareholders. Instead, like a trust, an offshore foundation has beneficiaries.

What is a Nevis Multiform Foundation?

A Nevis Multiform Foundation is a unique type of offshore foundation. Like an offshore foundation it is a separate legal entity with beneficiaries. Also, the founder elects whether to run the multiform foundation like a company, LLC, or a trust. This makes the Nevis Multiform Foundation resemble entities found in the USA.

Other Nevis Multiform Foundation benefits include:

  • can conduct an active business
  • no recognition of foreign judgments for asset protection
  • no taxes in Nevis
  • privacy and also confidentiality from public records
  • the founder (person who sets it up) can manage foundation, unless (or until) involved with a lawsuit
  • a “supervisor” can step in to manage the foundation if the manager is involved in a lawsuit
  • disregarded entity status available for pass-through IRS taxation
  • finally, minimal offshore reporting requirements for single member LLC foundation

How is a Nevis Multiform Foundation a better single member LLC?

A Nevis LLC Foundation can help you if you worry a judge will make you give away your single member LLC interests. It can happen.

You, as the founder, do not own the LLC Foundation. Therefore, if you have no ownership interest, you have nothing to give away.

As a discretionary beneficiary of the LLC Foundation, you have increased asset protection. If a lawyer targets you for frivolous litigation, you could even be removed as a beneficiary until the lawsuit goes away.

Does your business or real estate portfolio rely upon the protection of a single member LLC?

Will a judge make you turn over your LLC interests to a creditor? If you rely on “charging order” protection for your single member LLC, you might not get them.

Maybe you will. Maybe you won’t.

That’s unfortunately how our legal system works.

So if you think a little more protection could help you worry a little less, please schedule a time for us to talk. You can schedule an initial call online at livemorecarefree.com.

Colin Ley is an asset protection attorney and the co-founder of LayRoots (along with with partner in life & business – Shreya Ley)

Let’s talk about your asset protection strategy: book a free initial consult

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Hybrid Asset Protection Trust (like a house fire)

Hybrid Asset Protection Trust

A hybrid asset protection trust is a planning tool that utilizes a “best of both worlds” scenario. Those worlds being domestic asset protection trusts and offshore asset protection trusts. There are pros and cons to both of these asset protection trusts. However, a hybrid trust can be both a domestic trust and an offshore (or foreign) trust at the same time! This type of trust is a flexible tool that is optimized for any given scenario. [Read more…] about Hybrid Asset Protection Trust (like a house fire)

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Domestic Asset Protection Trusts vs. Offshore Asset Protection Trusts

The Pros and Cons of Domestic and Offshore Asset Protection Trusts

The main advantage of an “offshore” or foreign trust is that it removes you from the U.S. court system. Just as you diversify investments, you can diversify jurisdictions for your asset protection plan. I don’t think you can rely on the same court that can take away your assets, to also protect your assets. With a domestic asset protection trust, you’re stuck in the terrible U.S. court system where any knucklehead can file a lawsuit with or without good cause.

Let’s compare and contrast the domestic trust approach vs. the offshore, or foreign, trust approach. [Read more…] about Domestic Asset Protection Trusts vs. Offshore Asset Protection Trusts