Individuals who are in high risk occupation such as but not limited to doctors, lawyers, real estate developers and very wealthy individuals that can be targets of creditors and lawsuits. Also, individuals who have family issue such as divorce or child’s divorce.
- Control your property for your benefit
- Give what you want to who you want
- Give it how you want, when you want and the way you want
- Save every possible dollar from taxes, probate, court costs, and creditor claims
Life insurance represents a highly cost-effective and tax-efficient method of finding for estate liquidity and other planning. In addition, as a wealth accumulation or a wealth preservation vehicle, life insurance is attractive because it offers income tax-deferred accumulation of cash within the policy, income tax-favored access to policy cash, and income tax-free death proceeds. The question then becomes how to best structure policy ownership so that liquidity is available when needed-undiminished by taxes. With a well-structured life insurance policy, it can play a vital role in many aspects of estate planning including providing for estate liquidity, finding a business succession plan, providing an estate equalization bequest, a charitable bequest, or even a family legacy. The ILIT (irrevocable life insurance trust) is designated the owner and beneficiary of the policy. You appoint a trustee to manage the policy, in trust, on behalf of the trust beneficiaries (typically your family), according to instructions you incorporated into the trust–thereby maintaining some measure of indirect control.
Several States have adopted legislation that provide by various degrees of asset protection. If properly set up and maintained, the Domestic Asset Protection Trust will be significant barrier to creditors and will afford significant leverage to the debtor with respect to its negotiations with the creditor.
It is a trust that sets up in an offshore jurisdiction which has proactive trust legislation providing for substantial protection against creditors. One of the greatest advantages of the Offshore Asset Protection Trust is the fact that by its very nature any legal attack against its assets are transferred abroad to a different legal system.
A. Most foreign jurisdictions do not recognize U.S. judgments.
B. Some foreign jurisdiction require a much more difficult burden of proof for a creditor to challenge asset transfers to Offshore Asset Protection Trusts.
C. Some jurisdictions have a statute of limitations for challenging asset transfers to a trust that begins to run on the date of transfer.
D. Fees and expenses in litigation in the foreign jurisdictions are going to be substantial thereby serving as a strong deterrent to foreign litigation.