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Asset Protection Techniques

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By the time people reach their forties, they have usually amassed a few valuable assets like a house. With your growing financial portfolio and assets, it is important that you take steps to protect them. In this depressed economy, every asset you have and every dollar you earn is at risk. Creditors and litigators have become like vultures circling any successful person with unprotected assets. The only way to protect your hard-earned valuables is by setting up an appropriate asset protection plan.

The most important thing you need to keep in mind is that you have to start planning in advance. Only a few things you do after a liability or claim arises can diffuse the situation. In fact, most things you do afterwards could be considered a ‘fraudulent conveyance’, and a court can make you unwind the transaction and give your assets to the creditors. As a general rule, there is nothing you can do once a creditor situation arises.

Therefore, you need to take steps beforehand in order to ensure that creditors don’t have access to your assets.

To protect your assets, you can remove your name from their ownership, but still retain control on them. You want to look poor but be rich. You can do this by transferring your assets into a limited liability company or LLC. A creditor cannot touch the LLC unless you make some distributions from it. They can’t touch any of the assets in the LLC or any assets purchased or sold through it.

Another entity that can protect your assets is an irrevocable trust. Since you don’t technically own any of the assets you transfer into an irrevocable trust, your creditors won’t be able to attach any debt you owe. You can name a child, spouse or friend as the trustee and retain actual control over your assets while losing all legal ownership or control.

Remember that trusts are meant for personal assets, while business assets go into LLCs. LLCs aren’t meant as your personal piggybanks, so don’t use them as such. If you place your personal assets in an LLC, the creditor can pierce the entity on the basis of some theory. You should only place your personal assets in a trust. There is a long and solid law that protects trust assets as long as your trust is properly drafted and funded.

In any type of creditor situation, there are some exemptions granted to you by law. That means the law allows you to keep the assets under these exemptions no matter how much money you owe to your creditors. It is often a good idea to convert some of your ‘not exempt’ assets into assets that are exempt. The most common creditor-exempt entities are life insurance policies, pension plans, IRAs and annuities.

When establishing an asset protection plan, always consult a professional. The specific steps you need to take will differ according to your specific situation. An asset protection attorney is a trained specialist who can put into place a plan that can protect your assets without being deemed fraudulent.
 

vitomerchant

Offshore Agent
Some of the best asset protection structures I have seen was one drawn down in a PDF document which I can't access any more. It covered everything you need to consider from company formation to foundation to trust.
 

fireserve

Super Moderator
Business Angel
One of the best models I have seen during my time is the Fund -> Trust -> Trading company setup which is a very expensive but effective solution even today after all!
 

Sansa

Active Member
What a good written article. It covers every basic information and needs of every entrepreneur out there. Good job admin
 

Admin

Forum Moderator
Staff member
Why is Cyprus the darling amongst offshore options? Sorry if its a lame question.
No lame question. But when you are located in Europe and you want to have something that protects your privacy but also looks legit towards everyone that come in contact with your company then Cyprus is the most legit offshore company you can look at! Still it provides some fantastic privacy and tax benefits.
 

Admin

Forum Moderator
Staff member
As far as I remember from the past membership I had for the mentor group you have put a lot useful information in these forums right @Admin ?
Yes everything is in there.. you can even find drawings that show you exactly how to do this the correct way. It's still up to date and working.
 

happyjohn

Corporate Services
Mentor Group Gold
Business Angel
Entrepreneur
Do you know what documents are required to get good asset protection with an Seychelles / Cyprus offshore company setup?
There have been several replies already to this. You need at least a copy of passport and utility bill in English. If you don't have the English utility bill you need to get it translated and notarized!
 

khan

Corporate Services
My story explains a little about how good you are protected when you setup a Seychelles Holding Company owning the shares of a Cyprus company and use a Cyprus bank account to receive the money from your customers while you pay your creditors and lenders from a local account.

For approximately 3 years I gone broke, total broke and walked to one court after the other because there were lots of creditors after me that wanted my money and I was unable to pay my rent for the flat and other expenses that I needed fir living. They accessed my accounts locally and asked me a hundred times if I had any assets or funds somewhere else because then it was the time to tell. I told them no I don't have more, even that I knew that there was a few thousands on my offshore account in the Seychelles holding company.

So after a while I got started my business again and money start floating in, the creditors still didn't got their money and someone somehow got suspicious and found out that I received money on my Cyprus bank account but could not proof that this account was belonging to me! So to make a long story short, they tried to access the account by court order which they got here in my country but not in Cyprus because there was no fraud or scam going on, and they could not get access to it. I kept telling them this account was not belonging to me (which is the truths because the account belongs to the Cyprus company) so after a while they gave up.

Hope someone can use this story for something.. it's good to do proper asset protection!
 

RamsayB

Active Member
My story explains a little about how good you are protected when you setup a Seychelles Holding Company owning the shares of a Cyprus company and use a Cyprus bank account to receive the money from your customers while you pay your creditors and lenders from a local account.

For approximately 3 years I gone broke, total broke and walked to one court after the other because there were lots of creditors after me that wanted my money and I was unable to pay my rent for the flat and other expenses that I needed fir living. They accessed my accounts locally and asked me a hundred times if I had any assets or funds somewhere else because then it was the time to tell. I told them no I don't have more, even that I knew that there was a few thousands on my offshore account in the Seychelles holding company.

So after a while I got started my business again and money start floating in, the creditors still didn't got their money and someone somehow got suspicious and found out that I received money on my Cyprus bank account but could not proof that this account was belonging to me! So to make a long story short, they tried to access the account by court order which they got here in my country but not in Cyprus because there was no fraud or scam going on, and they could not get access to it. I kept telling them this account was not belonging to me (which is the truths because the account belongs to the Cyprus company) so after a while they gave up.

Hope someone can use this story for something.. it's good to do proper asset protection!
I salute you for being strong despite having problems and difficulty in your life! You're very awesome and I hope your new business will prosper even better than your previous one.
 

wonderwilly

Offshore Agent
That means the law allows you to keep the assets under these exemptions no matter how much money you owe to your creditors. It is often a good idea to convert some of your ‘not exempt’ assets into assets that are exempt. The most common creditor-exempt entities are life insurance policies, pension plans, IRAs and annuities.
Do you know if the law you refer to is International law or country specific?
 

negon

hannibal the cannibal
BANNED MEMBER
You may want to add that VPS Offshore hosting with a windows box may be a good idea for the perfect asset protection setup from company, bank account to hosting and accessing your data.
 

lastchance

New member
Can you list the basics to know when it's about asset protection? It seems to me there is a wealth of things to consider before I'm ready to setup a asset protection structure offshore or am I wrong?
How do you setup your company do you mind to explain please?
 

predator

New member
Do you think a Trust in combination with a Foundation is better for simple asset protection than Seychelles Holding company with full nominee services? I have read that it is overkill to setup a Trust and Foundation for small asset protection setups?
 
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