Jacob Stein specializes in structuring the ownership of your assets to make it difficult, or even impossible, for others to take them away. Creditors, plaintiffs, unhappy business partners, state and federal agencies - all can threaten those assets. Our asset protection planning can reduce, or even eliminate, those threats long before they appear. Our clients tell us that the peace of mind that asset protection brings is priceless.
Limited liability companies are a fantastic asset protection tool. You can read more about LLCs and their asset protection benefits here. Why do foreign entities (sometimes referred to as offshore entities) warrant special attention?
Foreign entities may, at times, a viable alternative to foreign trusts as a mechanism to protect liquid assets. Foreign trusts allow you the most protection imaginable, usually, unbreakable protection, but they are not the cheapest alternative around.
Some clients do not want to go through the expense or the trouble of a foreign trust, or may simply not need that much protection. A foreign trust may be overkill in some cases.
Holding assets in your name directly also does not work. As a general rule, any asset that is owned by you directly (titled in your name) can be taken from you by a creditor. It does not matter whether this asset is stock of a corporation or a foreign bank account. All assets, domestic and foreign, owned by you directly can be reached.
One of the few exceptions to this rule is an interest in an LLC. All LLCs are shielded by the charging order protection. What is then the difference between a domestic (U.S.) LLC and a foreign LLC?
Simple. A foreign LLC is governed and protected by the laws of a foreign jurisdiction. This means that it may be possible to move any litigation surrounding a foreign LLC to a foreign country. This makes it very expensive for the plaintiff to pursue a foreign LLC. Not impossible, but expensive.
Sometimes all we need to do is change the plaintiff's or the creditor's economic analysis. Destroy their profit potential and they will leave you alone.
All entities, especially foreign entities, may have tax consequences. You should consult with your advisors and implement these strategies very carefully.