A prospective client asked me about the following asset protection plan. The wanted to establish an entity known as “an Independent Pure Business Trust.” The beneficiary of the trust would be an offshore trust. The offshore trust would establish a Swiss bank account. The client could borrow money from the Swiss account to pay living expenses. The loans would be secured by something called a “common law lien” on the caller’s property.
I told the client I would not take his money to investigate or set up such an asset protection plan, because I saw no legal benefit. I never heard of a “common law lien” (maybe there is such a thing somewhere), and the only pure business trusts I am familiar with are a type “abusive trusts” used to evade income tax. I authored a post a few days ago about complex asset protection plans usually fail. The same comment applies to asset protection plans that use novel legal terms like independent pure trust that few lawyers would recognize or endorse.
Creating an effective asset protection plan does not involve generating new names and varieties of legal entities. The fancy names will neither confuse nor deter your creditors. Stick with plans that use common legal entities and employ these common entities properly and openly in your personal planning