I have invested about 100 h the ASSET PROTECTION topic (research, talked with lawyers and different providers). The more I read, the more I doubt the actual need of a trust for 99% of the cases.
Disclaimer: I do understand that there is a not a one-size-fits-all type of situation!
My conclusions so far:
1. As many other on this forum, I have come to the conclusion that the physical location/ jurisdiction of the assets AND the physical location of the owner are even more important than the juristidiction where one incorporates his asset protection vehicle.
2. It is very very hard to find HONEST advice on this matter. There are not many people who really know this topic (but a lot who say they do). Everyone is trying to sell you whatever they have for sale (if they are specialised in Cook Island they are going to give you all the reasons why Nevis is worse, if you talk to someone specialised in Nevis, they will give you just as many reasons why Cook Island is worse and so on).
3. There is extremely hard to find REAL FULL TRANSPARENT total cost for the construction starting the 2. year . And almost every provider seems to ‘’forget’’ to tell you all about it. They give you a rough estimate which looks good (2-3k) without explaining what other ‘’small fees’’ comes on top.
4. Reduntant (useless?) overinflation of the structures is quite common: it starts with a trust, than you need a Holding under the trust (obviously again in an offshore jurisdiction) and than another company to really hold the real estate / do the business locally. Is this really necessary for more than 1% of us ?
5. There is not much talk about differences in THREATS that one is trying to avoid through this kind of structure. For example , if you live in Europe the risks are quite different than in the USA. Moreover, on the individual level the threats are quite different. Most of the offered constructions are focused on protecting yourself from non-governamental creditors. But isn’t it just as important to be protected by the more and more abusive goverments (talking from a pure legal-earned-money perspective here)?
6. There is not much discussed about what comes after the formation. So you payed X$ and incorporated the trust and Y$ and incorporated the Holding LLC and Z$ and incorporated the local company that wants to let’s say buy a real estate and rent it. Everyone advices you to give a private credit to one of the companies in this chain (ideally the one in the investment jurisdiction). What happens if the court decides to seize the debt ? wouldn’t that defeat the whole purpose of the plan ? (sure, the provide has something else to sell to ALLEGEDLY protect you from this too)
7. In the case of Trust, I feel the risk of the trustee going rogue is being downplayed. Even in old / traditional / not-so-offshore jurisdictions (like Lichtenstein - foundation) have been multiple situations where some fiduciary company took away the money / did not follow the instructions of the founder/settler. Who is to say that when s**t really hits the fan (on a personal level e.g. criminal trial or on a global level e.g. in a World War), they are really going to act as instructed. If you ask a provider, they will just recommend you to ask another layer of protection (like a trust protector)…. so more expenses . Even if the risk would be mathematical 0,1% of this happening, am I really willing to accept this risk to my back up plan . Of course, the provider can give you another trust in a different jurisdiction to spread the risk…
8. Some lawyers that I talked to believed that a holding company can do in most cases just as much as a trust if set up properly (for example with an call option clause in your favour) for so much less money. Why is this not being talked about more ?
9. Almost no one talks about the problems of getting an account for the subsidiary company (as some bank do not open accounts if the local company has an off-shore company as shareholder). Of course you can get some account in another off-shore jurisdiction, but how realistical is it to use that on an everyday operation business? Yes, I know, the provider will just open another company in an on shore jurisdiction or provide u with a swiss account for a ‘’small fee’’….
I would like to hear other peoples honest thoughts on this topic, as there is less likely that an answered here is money-driven as it is with any company provider. Just to be clear: I am absolutely NOT trying to save money here. I am more than willing to pay much more than the normal quoted fees to any provider IF I REALLY GET THE BEST OPTION FOR ASSET PROTECTION. My biggest concern is that everyone is biased and no one is presenting you what YOU need but what THEY want you to buy.
Thanks
Disclaimer: I do understand that there is a not a one-size-fits-all type of situation!
My conclusions so far:
1. As many other on this forum, I have come to the conclusion that the physical location/ jurisdiction of the assets AND the physical location of the owner are even more important than the juristidiction where one incorporates his asset protection vehicle.
2. It is very very hard to find HONEST advice on this matter. There are not many people who really know this topic (but a lot who say they do). Everyone is trying to sell you whatever they have for sale (if they are specialised in Cook Island they are going to give you all the reasons why Nevis is worse, if you talk to someone specialised in Nevis, they will give you just as many reasons why Cook Island is worse and so on).
3. There is extremely hard to find REAL FULL TRANSPARENT total cost for the construction starting the 2. year . And almost every provider seems to ‘’forget’’ to tell you all about it. They give you a rough estimate which looks good (2-3k) without explaining what other ‘’small fees’’ comes on top.
4. Reduntant (useless?) overinflation of the structures is quite common: it starts with a trust, than you need a Holding under the trust (obviously again in an offshore jurisdiction) and than another company to really hold the real estate / do the business locally. Is this really necessary for more than 1% of us ?
5. There is not much talk about differences in THREATS that one is trying to avoid through this kind of structure. For example , if you live in Europe the risks are quite different than in the USA. Moreover, on the individual level the threats are quite different. Most of the offered constructions are focused on protecting yourself from non-governamental creditors. But isn’t it just as important to be protected by the more and more abusive goverments (talking from a pure legal-earned-money perspective here)?
6. There is not much discussed about what comes after the formation. So you payed X$ and incorporated the trust and Y$ and incorporated the Holding LLC and Z$ and incorporated the local company that wants to let’s say buy a real estate and rent it. Everyone advices you to give a private credit to one of the companies in this chain (ideally the one in the investment jurisdiction). What happens if the court decides to seize the debt ? wouldn’t that defeat the whole purpose of the plan ? (sure, the provide has something else to sell to ALLEGEDLY protect you from this too)
7. In the case of Trust, I feel the risk of the trustee going rogue is being downplayed. Even in old / traditional / not-so-offshore jurisdictions (like Lichtenstein - foundation) have been multiple situations where some fiduciary company took away the money / did not follow the instructions of the founder/settler. Who is to say that when s**t really hits the fan (on a personal level e.g. criminal trial or on a global level e.g. in a World War), they are really going to act as instructed. If you ask a provider, they will just recommend you to ask another layer of protection (like a trust protector)…. so more expenses . Even if the risk would be mathematical 0,1% of this happening, am I really willing to accept this risk to my back up plan . Of course, the provider can give you another trust in a different jurisdiction to spread the risk…
8. Some lawyers that I talked to believed that a holding company can do in most cases just as much as a trust if set up properly (for example with an call option clause in your favour) for so much less money. Why is this not being talked about more ?
9. Almost no one talks about the problems of getting an account for the subsidiary company (as some bank do not open accounts if the local company has an off-shore company as shareholder). Of course you can get some account in another off-shore jurisdiction, but how realistical is it to use that on an everyday operation business? Yes, I know, the provider will just open another company in an on shore jurisdiction or provide u with a swiss account for a ‘’small fee’’….
I would like to hear other peoples honest thoughts on this topic, as there is less likely that an answered here is money-driven as it is with any company provider. Just to be clear: I am absolutely NOT trying to save money here. I am more than willing to pay much more than the normal quoted fees to any provider IF I REALLY GET THE BEST OPTION FOR ASSET PROTECTION. My biggest concern is that everyone is biased and no one is presenting you what YOU need but what THEY want you to buy.
Thanks
