How to form trusts and in what ways can they protect against asset confiscation?

[DavidS]

If people are worried about their assets being confiscated and want to hide assets, wouldn't trusts be a good solution?

Why yes, why not and how to form them?

 

[Sols]

Asset protection is not the same as hiding assets. Hiding assets is often a crime (such as unlawful failure to disclose), whereas protecting isn't.

Asset protection normally refers to protecting assets from creditors, frivolous seizure, and such by the original owner no longer having effective control over the assets. For example, you might place your assets in a trust or foundation which is controlled by a fiduciary. You then no longer control the assets. They aren't yours.

While asset protection structures often have a high degree of secrecy, they shouldn't be reliant on secrecy to work. Secrecy won't hold up in court.

These structures require a high degree of customisation to fit the type of assets, types and levels of threat, size of wealth, jurisdictions involved, client's interests, and so on and so forth. This makes them expensive and time consuming, which is why they are usually limited to the very wealthy for whom the admin costs are insignificant.

There are a lot of service providers out there selling trusts in a manner similar to how they sell companies. I'd be very cautious about working with such a service provider. The trust you end up with might not be the right fit.

 

[DavidS]

Asset protection is not the same as hiding assets. Hiding assets is often a crime (such as unlawful failure to disclose), whereas protecting isn't.

Asset protection normally refers to protecting assets from creditors, frivolous seizure, and such by the original owner no longer having effective control over the assets. For example, you might place your assets in a trust or foundation which is controlled by a fiduciary. You then no longer control the assets. They aren't yours.

While asset protection structures often have a high degree of secrecy, they shouldn't be reliant on secrecy to work. Secrecy won't hold up in court.

These structures require a high degree of customisation to fit the type of assets, types and levels of threat, size of wealth, jurisdictions involved, client's interests, and so on and so forth. This makes them expensive and time consuming, which is why they are usually limited to the very wealthy for whom the admin costs are insignificant.

There are a lot of service providers out there selling trusts in a manner similar to how they sell companies. I'd be very cautious about working with such a service provider. The trust you end up with might not be the right fit.

Thank you so much. How to implement these trust structures? Where does one turn?

 

[Sols]

Speak with the likes of Sovereign Trust, Appleby, Dixcart, Vistra, Ogier, Walkers, Conyers, Carey Olsen, Asiaciti Trust, or SDTC (South Dakota Trust Company). There are dozens more, but that should get you started. They span different jurisdictions from US and Caribbean to Europe to South Pacific.

 

[DavidS]

Speak with the likes of Sovereign Trust, Appleby, Dixcart, Vistra, Ogier, Walkers, Conyers, Carey Olsen, Asiaciti Trust, or SDTC (South Dakota Trust Company). There are dozens more, but that should get you started. They span different jurisdictions from US and Caribbean to Europe to South Pacific.

How much do they cost to setup and maintain? And are those assets actually untouchable? Looking for this structure to hold stock ETFs.

 

[Sols]

Untouchable in what sense?

Fees are hard to assess because of the customization I mentioned and how sophisticated you want/need it to be. They might also charge a custodian fee, which is based on the value of the assets. You're looking at fees in the 25–100,000 EUR range. Sometimes more, sometimes less.

 

[DavidS]

Untouchable in what sense?

Fees are hard to assess because of the customization I mentioned and how sophisticated you want/need it to be. They might also charge a custodian fee, which is based on the value of the assets. You're looking at fees in the 25–100,000 EUR range. Sometimes more, sometimes less.

If one owes money to government for example, they can't extract that money from trust, correct?

 

[Sols]

There's a lot of nuance that goes into answering something like that but the short answer is that no, they cannot — if you have done everything correctly. "Correctly" is the keyword because things like trusts and foundations can be broken, pierced, or bypassed in cases of criminal activity by you.

Let's take for example tax debt. If you no longer own cash (or the assets), the government can still hold you personally liable for the tax debt. While you might not have the cash in your pocket, they can garnish your wages, force sale of other assets that you still own directly (cars, houses, boats), and generally make your life miserable.

They also have the option of trying to pursue your assets by tracing where they went and question the legitimacy of the structure. This is where having done things correctly comes in. If you have, any local court where your (former) assets are held will throw out any request for them. Or your fiduciary/trustee will invoke a special clause of the deed under duress and transfer the ownership yet another step away.

And so on and so forth. There are many ways to do this.

 

[DavidS]

There's a lot of nuance that goes into answering something like that but the short answer is that no, they cannot — if you have done everything correctly. "Correctly" is the keyword because things like trusts and foundations can be broken, pierced, or bypassed in cases of criminal activity by you.

Let's take for example tax debt. If you no longer own cash (or the assets), the government can still hold you personally liable for the tax debt. While you might not have the cash in your pocket, they can garnish your wages, force sale of other assets that you still own directly (cars, houses, boats), and generally make your life miserable.

They also have the option of trying to pursue your assets by tracing where they went and question the legitimacy of the structure. This is where having done things correctly comes in. If you have, any local court where your (former) assets are held will throw out any request for them. Or your fiduciary/trustee will invoke a special clause of the deed under duress and transfer the ownership yet another step away.

And so on and so forth. There are many ways to do this.

Where can one find detailed guides on how to structure this kind of trust?

 

[Sols]

There no detailed guides. Contact service providers (lawyers, fiduciaries, trustees) and combine that with your own research.

You can find broad strokes in brochures on some of these service providers' websites and gleam some insight from investigative reporting by the likes of ICIJ and their partners into how this world works. The journalists usually get the finer details wrong.

 

[DavidS]

There no detailed guides. Contact service providers (lawyers, fiduciaries, trustees) and combine that with your own research.

You can find broad strokes in brochures on some of these service providers' websites and gleam some insight from investigative reporting by the likes of ICIJ and their partners into how this world works. The journalists usually get the finer details wrong.

If trusts are such an effective method why is everybody not using them?

 

[timelord]

Tangential question: do we know how the world top billionaires strategy on asset protection (dont think that Bill Gates or Warren Buffet does not own their asset and uses trusts)? how about strategies for people from $1m, $10m, $100m?

 

[DavidS]

There are plenty of solutions for super rich. Of course they use trusts and complex structures. Their asset protection is from another planet compared to family trusts.
If you have any exact question it will be easier to discuss. It is just too broad to talj about something exact.

Form what sum do trusts start making sense? From 1M, 10M, 100M?

 

[timelord]

There are plenty of solutions for super rich. Of course they use trusts and complex structures. Their asset protection is from another planet compared to family trusts.
If you have any exact question it will be easier to discuss. It is just too broad to talj about something exact.

Can you give example for "from another planet"? I tried to look for setups of top 10 richest but dont get much. I think they all have family offices (handpick team, not with a company providing services) but I dont know much beyond this. Of course I dont expect to simply find this as this should be a guarded secret to some extend.

 

[fbsworld]

If people are worried about their assets being confiscated and want to hide assets, wouldn't trusts be a good solution?

Why yes, why not and how to form them?

Do you know you can also setup a Foundation? It is less expensive than a trust and easier to manage (Council members instead of trustees). FYI, RAKICC offers a Foundation law at a very low cost.

 

[lory]

mined to elaborate while stick close to the topic @fbsworld ?

I'm interested in learning about this method.

 

[fbsworld]

mined to elaborate while stick close to the topic @fbsworld ?

I'm interested in learning about this method.

I'm not working for RAKICC but you have all info there: Services - Private Client Solutions - RAK ICC Foundations

 

[forbidd3nknowl3dg3]

There are a lot of service providers out there selling trusts in a manner similar to how they sell companies. I'd be very cautious about working with such a service provider. The trust you end up with might not be the right fit.

Sorry for bringing back an old thread, but I have a question I really want to ask Sols.

Can you name some of these asset protection trust resellers? I'd love to check them out and see what their business looks like.

Do you think these resellers make good business? One problem I see is that OAPTs are much more expensive than corps and other business entities. Is there much of a market for these products online?

 

[Sols]

Can you name some of these asset protection trust resellers? I'd love to check them out and see what their business looks like.

I'd be lying if I said I kept track of them and could name them. You can probably find them just by searching online for some relevant keywords and compare which results are not from licensed/regulated, reputable service providers.

Do you think these resellers make good business? One problem I see is that OAPTs are much more expensive than corps and other business entities. Is there much of a market for these products online?

Many just come and go. Don't know if that's because they go out of business or some other reason.

 

[forbidd3nknowl3dg3]

Many just come and go. Don't know if that's because they go out of business or some other reason.

A lot of the service providers I found (who appeared to be resellers) were lawyers selling asset protection trusts and other structures online (Asset Protection Planners - General Corporate Services, Inc) (AssetProtection.com). I'd like to know how much business these guys do.

Sols, do you think there is a market for qualified professionals (i.e., lawyers, accountants, etc) to sell APTs and other structures online as a reseller?

I think there is value in having a qualified professional (with the necessary contacts and knowledge) reselling trusts and other structures from other service providers. But that's just my opinion. What do you think?