Asset Protection

Asset Protection: Where is Offshore?

By July 30, 2019 No Comments
a city night view

The term “offshore” connotes many things — some unfavorable, many inaccurate

To some, the term “offshore” suggests exotic foreign locales with long, white sandy beaches and grass-skirted natives. Others think of white-collar criminals hiding out in some foreign fortress immune to U.S. laws.

Neither picture is accurate. Notwithstanding the graphic above, “offshore” does not necessarily mean tropical; any country other than the U.S. is offshore, and there are about 60 jurisdictions that can accommodate your trust business. “Offshore” also does not mean the dominion of the con man, racketeer and fleeing felon. Wealthy, respectable citizens with nothing to hide or fear are turning to offshore jurisdictions as a matter of prudent planning. Current estimates say that $5 trillion is currently under management in offshore financial centers.

The Right Jurisdiction

Savvy investors often realize the importance of picking the right jurisdiction for their situation. For example, large corporations having no operations, assets or physical presence in Delaware have incorporated in that state because of its favorable corporate law. Likewise, many business owners have signed contracts that contain a clause providing that, say, Illinois law will apply to a particular dispute.​

So it is with international trusts. In founding a trust as the cornerstone of an integrated estate plan, we look to the foreign jurisdiction whose law is most favorable to you and that offers the maximum protection.

Selecting a Foreign Home

The 60 jurisdictions that can accommodate your trust vary in their desirability. A good host country should:

  • Provide statutory certainty on key trust and fraudulent conveyance issues
  • Be politically stable
  • Have modern telecommunication facilities
  • Offer a variety of trust professionals who understand the purposes and uses for international trusts
  • Present no language or cultural barriers
  • Impose little or no taxation on trusts domiciled within its borders.

We have found that two jurisdictions in particular serve as attractive hosts for international financial plans: the Cook Islands, a self-governing, South Pacific island group in free association with New Zealand, located about 2,800 miles west of Hawaii, and the island of Nevis, near St. Kitts in the Caribbean Sea.