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Enhance Wealth Protection With Offshore Insurance

Enhance Wealth Protection With Offshore Insurance

(Dollar Photo Club)

By    |   Sunday, 11 December 2016 10:03 PM

In times of financial uncertainty, taking extra measures to protect your financial security can be the critical difference between having a financially secure life and becoming destitute.

The prospect of being broke is not a pretty picture. When I raise this disastrous potentiality in discussions far too many people think that it can’t happen to them. They have their assets well invested and they have do not believe that they will find themselves in desperate economic circumstances. 

Then they get sued. Or divorced. Or the government changes some regulations. And with that, their world falls apart. It’s the unexpected, unforeseen, unintended financial risks happen all too regularly.

Making money is hard enough. Staying wealthy can become even harder. 

Most lawyers express their complete confidence in the U.S. legal system. And most often, their reliance is rewarded. While the laws vary from state to state, there are several laws which can easily protect wealth from creditors or angry spouses.

I think it can be reasonably said that for people who are lucky enough to have a positive net worth that public policy is for debtors protecting their assets from creditors of all kinds and descriptions. 

Corporations are explicitly used to limit the liability of shareholders separate from their investment in the company. Without that, there would be few investors and, so no stock markets. Raising capital from many people would be impossible. Basically, limited economic liability is the critical key to our 21st-century economy.

The states have enacted a lot of law to encourage people to make investments while being protected from liability. Limited partnerships, limited liability companies and numerous variations of them all facilitate the accumulation of capital. It’s capital that makes for capitalism.

But when push comes to shove in a lawsuit, limited liability and its protection from creditor claims becomes complicated. Creditors also have laws enacted to give them a right to go after debtors and their efforts to keep wealth safe and secure from attachment and levy.

For those people without their head buried in the sand so to speak, that leaving their financial security up to some court proceeding is not comforting. Nearly any lawyer will tell you that for going to court nearly anything can happen. In any courtroom, if a judge wants a cow to be called a horse, then in that courtroom a cow becomes a horse. 

One way to greatly enhance the probability of surviving the loss of all your hard-earned wealth because of the vagaries of the American legal system is to hold your wealth, or at least a part, outside the American legal system where it can be better protected.

A large number of offshore jurisdiction have copied the American system of asset protection law with substantial improvements. While U.S. law has allowed for spendthrift trusts, offshore countries have elevated these to create asset protection trust law. Because the offshore jurisdictions have been so successful in attracting wealth, a growing number of states in the United States have copied them and become competing asset protection jurisdictions themselves.

One way of kicking up the ability to protect wealth is to have an offshore protective entity, like an asset protection trust or limited liability company, exchange the investment assets for a protected life insurance policy or annuity. Just like some states in the U.S., these may be under law held to be exempt from creditors. 

Effectively, the policy values are removed from the United States legal grasp and injected with more wealth protection under a more favorable legal environment.

If done correctly, this can all be done with full compliance for federal tax purposes with tax-deferral just like a regular U.S. life or annuity policy.

For those who want to enhance their wealth protection, an offshore insurance structure may suit your circumstances well. 

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher. 
 

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For those who want to enhance their wealth protection, an offshore insurance structure may suit your circumstances well.
wealth, protection, offshore, insurance
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2016-03-11
Sunday, 11 December 2016 10:03 PM
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