An offshore bank account is a depository account maintained at a bank outside the United States. Offshore bank accounts are viewed by many as an exotic tool for privacy and tax avoidance—and only for the very wealthy. But actually an offshore bank account can be a useful tool for asset protection planning for people with…
For many years the Cayman Islands and Cook Islands were the “go-to” jurisdictions for creation of an offshore trust for clients needing to protect assets outside of the United States. However, recently the Cayman Islands changed their laws making it a relatively unattractive location to set up an offshore trust. In contrast, a few years…
The Nevis government enacted an amendment to the Nevis Limited Liability Company Act in December, 2018. The amendment pertains to the taxation of Nevis limited liability companies that does business in Nevis. The amendment appears to be in response to international movements to restrict use of offshore tax havens. The amendment provides that Nevis LLCs…
A federal bankruptcy court ordered a debtor to turn over to a bankruptcy trustee money the debtor had received from a property auction. Although initially admitting he received the money, at a subsequent contempt hearing the debtor said the had spent the money so there was nothing left to turn over. The court considered whether…
An important rationale for offshore asset protection is effecting the removal of the debtor’s asset beyond the jurisdiction of U.S. courts. For example, people choose to form LLCs outside the U.S. because they believe a U.S. court would not have jurisdiction over the debtor’s membership interest in order to impose a charging lien. That theory…
Debtors set up LLCs in foreign countries to protect against creditor charging liens against their membership interest and distributions. During legal research this past week I came across a Connecticut case where the creditor found a way to effectively attach a debtor’s distributions from LLCs formed outside the U.S.
Most offshore asset protection plans, and similarly complicated domestic plans, do not hold up if a motivated creditor pursues its attacks through a vigorous legal challenge including appellate review. Most appellate courts will not sustain the promised protection of offshore planning. The most recent example I read was an unpublished order from a Minnesota appeals…
The New York Times published an article this past weekend regarding Cook Islands asset protection trusts. The article suggested that these offshore trust provide excellent protection for even the most egregious debtors.
Over the years I have recommended Nevis limited liability companies to many asset protection clients. Most people who have formed a Nevis LLC has asked about how and where his money will be invested within the LLC entity.
Many of my clients have used Nevis limited liability companies as part of an asset protection plan.
