Asset Protection Plans
This excerpt is from an open source article and is not necessarily the opinion of bostatic.com
The redistribution of wealth from the more fortunate to the less fortunate is facilitated by the progressive tax system in the United States. It is also made by the judicial system through litigation, therefore many of entrepreneurs, business owners, retirees and others who have cumulated significant amount of wealth are often financially devastated by the U.S. judicial system. That’s why every wealthy person, even the ones with an average amount of property, need asset protection plans to prevent the risk of claims from the unknown future judgment creditors, particularly the frivolous claims, or even the employment- related claims that cannot be covered by most insurance policies, among many other exceptions to liability insurance coverage.
The best solution is to implement asset protection plans correlated with your estate plan. This way, providing additional assurance for your financial future and the means to make gifts of interests in protective assets to family members, far away from the view of your future creditors and from all of the creditors of your family members, your asset protection plan will intensify your estate plan, because the objective of legitimate offshore asset protection planning is to avoid litigation altogether. To do this, it uses a structure linking the prudent use of professional advice and foreign law. But pay attention for this is not intended to protect dishonest or incompetent persons from creditors. The asset protection plans, among legitimate tax- neutral and investment vehicle are available. Tempting investment vehicles can be represented by international variable life insurance and internationalvariable annuities with reputable companies in secure offshore jurisdictions. Having different commission structures, they are better protected and are not subject to certain U.S. taxes.
It is also good to know that asset protection plans may incorporate the insurance against automobile accidents, which is rarely maintained at the level necessary to cover these kinds of claims. Because of the high level of coverage, it may be prohibitively expensive or even impossible to insure.
Being done with full IRS compliance and disclosure, asset protection planning and proper tax planning do not involve tax evasion or anti-IRS theories. Always keep in mind that high quality asset protection plans come with good advices, formulated on a case-by-case basis. Ignore the cheap asset protection advices posted on the Internet. Asset protection plans are not implicated in hiding money offshore or using offshore credit card accounts.
Asset protection plans provide with excellent solutions to asset protection issues. Being compliant with U.S. laws, variable life insurance policies and variable annuity contracts offer a wider range of investment opportunities at lower costs beside U.S. policies for policies with total aggregate premiums of over $100,000.
Another matter which needs your full attention is in choosing a consultant for asset protection plans. On the Internet you will find many offshore service providers who offer various offshore tax planning and asset protection schemes. You will first have to look for a consultant with extensive tax experience that is able to give you competent and comprehensive U.S. tax advice.
Asset protection plans are complex and challenging tasks in today’s environment, and need to be properly designed and implemented. Just as a living trust is of small use if it is not funded, an asset protection plan is of little use unless it is funded and the documentation is done correctly.
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