Offshore FAQ
Jim Bennett

Offshore FAQ

1."I'm far from ultra-rich. Is an offshore asset protection plan right for me?"

If you have $100,000 or more in liquid assets, an offshore asset protection plan is definitely worth considering.

2."Can't I just wait until I'm sued to deal with this?"

You'll have much more protection if you act now. If you move your money before you get sued, it's a slam dunk that you will keep it. But if you wait until you are in trouble, your adversaries and their lawyers will attack you with much more powerful weapons. When it comes to protecting assets, preventing a problem is smarter and much less expensive than trying to solve a problem that has exploded into a crisis for survival.

3."I've already been sued. Is it too late to protect my assets?"

No, it's not too late. And I gladly offer my services to help you protect them. What's more, I assure you that you'll be able to keep your money. But the fight will be much nastier and more expensive. It won't be pretty.

Your adversary will likely be successful in getting the U.S. judge to order you to return your assets to the United States because they were fraudulently conveyed. As a result, you stand a higher risk of being held in contempt of court.

And you may need to leave the country while I hammer out a settlement. (This is where your second passport comes in handy.) Still, I believe it is better to be a wealthy person living on a Caribbean island for a year than a destitute person living in the U.S.

4. "What if I set up a plan now, but I don't transfer money into it until the last minute?"

Bad strategy! Remember, if you set up your asset protection plan when you are not under attack, you will keep full control over it. As soon as you fund it, the clock starts ticking on the statute of limitations on fraudulent conveyances. So the optimum strategy is to set up a plan now, fund it now, start the clock ticking now and enjoy full control. If you never get sued, great! But if you do, your firewalls will be in place and your plan will quickly and summarily stop predator-plaintiffs and their lawyers dead in their tracks.

5."What are the mechanics of this offshore asset protection plan?"

I design each plan specifically for one individual client. Still, many plans contain common components that have proved effective for decades. Here's an example of a simple offshore asset protection plan and how it works:

We set up a private trust company, a trust, and a limited liability company. You control the private trust company, the private trust company controls the trust, and trust owns the limited liability company. Bottom line: You control everything!

Life goes on as before until you get sued. Then our pre-selected emergency trustee takes over. Your defense lawyer tries to get an early lowball settlement by telling the predator-plaintiff that you are judgment proof. If the predator-plaintiff or his/her lawyer is too pig-headed to listen to reason, they may press onward and try the case. And who knows, they may even win. But then they discover what your lawyer told them all along: They can't collect!

If they travel to your protective country to collect, your emergency trustee transfers everything to another country. Then another country. And then another until your opponent is worn down enough to either give up completely or settle for a fraction of his judgment. When the lawsuit is over, your emergency trustee returns control to you until next time. Really, it's all quite simple.

6."What types of assets can I protect offshore?"

The easiest assets to protect are liquid assets and intangible assets that can be moved out of the United States. These include cash, certificates of deposit, stock in foreign companies, mutual funds, money market funds, insurance policies and annuities.

The hardest assets to protect are tangible assets, like real estate, that must physically stay in the U.S. I can make real estate and other tangible assets tougher for predator-plaintiffs to reach, but persistent plaintiffs and their lawyers, along with a sympathetic judge, will probably be able to get to them eventually. If all your assets are tied up in your U.S. business, the best thing to do is leave as little cash as possible in your business. Move as much cash as you can to yourself, then move that cash into your asset protection plan. You can always lend some back later, as the need arises.

7."In what countries can I establish an offshore asset protection plan?"

The international wealth protection business is highly competitive. This works in your favor because offshore protective countries continue to leapfrog each other to make their laws more and more protective. While you can choose from many countries, (68 are included in the industry bible, "Tax Havens of the World"), some are far better than others. I have specific countries that I recommend you use, and I have others that I strongly recommend you avoid. You'll find details about how to select the right country in my handout called, "Smart Ways to Protect Your Assets".

8."How do I transfer assets into my plan?"

In most cases, assets can be transferred by signing a few pieces of paper. Investments in brokerage accounts will require some added paperwork, but your offshore bank will help us. Cash can be transferred easily by wire. But don't worry about the time and effort required. I take care of all the transfers for you, as part of my service.

9."How do I bring money back to the United States?"

At your request, the trustee will distribute money to you or your family members, or the trustee can lend the money. Just remember to bring back as little as possible because every dollar that comes back is vulnerable to predator-plaintiffs and their lawyers.

10."I have a complex financial portfolio, with many types of assets. How do I maximize my protection?"

The best technique is to isolate, inside your plan, risk-generating assets from safe assets. Assets like real estate or businesses that attract lawsuits go into separate international limited liability companies ("LLCs"). Mutual funds and cash go into their own LLCs. This builds yet another firewall between predator-plaintiffs and your liquid assets.

11."How do I keep my financial affairs confidential?"

Owning your own offshore asset protection plan is a good start. Your international affairs won't be sold to a credit bureau or to marketers. You won't see IRS form 1099s floating around in the mail. You won't be receiving statements and junk mail that broadcast the name of your bank.

The next thing I suggest is that you keep your mouth shut. don't use your plan as a subject for cocktail party chatter. Don't discuss it with your golf buddies. You may decide not to discuss it with your kids or spouse. Consider discussing it only with your lawyer and accountant.

And last, never pay anyone with a check or wire transfer directly from your plan. Always put the money into a U.S. checking account first and then move the money by check or wire from the U.S. account to the other person.

12."How can I become more comfortable with offshore asset protection plans?"

If you feel a little unsettled at first, start by moving money into your plan a little at a time. As you grow accustomed to how the plan operates, you will grow more comfortable and you will move more money. You should know, however, from an asset protection point of view, that moving a little money at a time is not as good as moving all your assets at once. Still, it is much better than procrastinating until you feel totally comfortable. You should move your money into your plan at whatever speed allows you to still sleep well at night.

13."How do I get out of my asset protection plan if I don't want it to continue?"

Simply write a "letter of wishes" to your private trust company or independent trustee. If you control your plan, you can simply terminate it and distribute the proceeds. If you use an independent trustee, he will almost always comply, unless your request is made under duress. Your trustee will insist that the proceeds be distributed in accordance with the trust agreement, so if you want to change beneficiaries, you should first send a letter of wishes to that effect.

14."Can my offshore asset protection plan be part of my estate plan?"

Absolutely. I will work with your estate planning advisors to make sure that your offshore asset protection plan and your estate plan form an integrated whole.

15."What happens to my plan and the trust assets when I die?"

Whatever you want to happen. The money can come back home to your heirs. It can be split into separate protective trusts for your heirs and spouse. It can be moved into separate offshore asset protection plans that your heirs have created. You have many options. You tell me what you want to happen and I'll set it up that way.

16."Can you help me qualify for Medicaid coverage for nursing home care?"

Yes. If you would like to add this feature to your plan, I will work with a Medicaid and Elder Law specialist lawyer to properly structure it.

17."Can an international trust be a charitable trust?"

Yes. I can design that feature into your offshore asset protection plan.

18. "Can an international trust be a life insurance trust?"

Again, yes. Just ask and I will design this into your offshore asset protection plan.

19. "Can an offshore asset protection plan avoid probate?"

Definitely. Assets in the trust are not owned by you, so they do not go through probate.

20. "Can I use my plan to defer estate taxes until my spouse's death?"

Yes. I can set up your trust so, at your death, it splits into what is known as a "bypass" trust and "QTIP" trust. This puts as much money as possible (but never enough to trigger immediate estate tax) into a trust for any beneficiary and the rest into a trust, the income from which benefits your spouse for life and anyone else you name after your spouse?s death.

21."Do I have to tell the IRS about my asset protection plan?"

Yes. You will give the IRS information about your trust and trust transactions on various IRS forms. You should be open and up-front with IRS. Simply answer the questions honestly, and report everything properly, and IRS should leave you alone. (I will give you written instructions that you can pass on to your CPA.) If you need more help, call me, or invite your CPA to call me directly. I will only talk to you CPA with your permission, of course.

22."Do I have to pay taxes on trust income even if the income stays offshore?"

Yes. You will report the trust income to IRS just like it was your own. You can request that the trustee pay you an amount equal to your tax liability, or you can pay the tax from your stateside accounts.

23."Can my present lawyers set up an asset protection plan for me?"

Perhaps, but it's not likely. This area of law is highly specialized. The lawyer you choose needs in-depth knowledge and experience in international transactions, international law, international finance, as well as foreign cultures and the way those cultures do business. Your lawyer must also have the necessary professional contacts in key foreign jurisdictions so your asset protection plan is airtight, bullet proof, and judgment proof. When you prepare to place sizable amounts of money in other countries, you must minimize all risks. One risk you face is choosing the wrong lawyer.

24."How are you different from other asset protection lawyers?"

Actually, in many ways that benefit you and your assets.

First, I have been on the other side. I once chased debtors for banks and often forced them into bankruptcy. As a result, I know both the sophisticated ways -- and the underhanded ways -- plaintiffs, lawyers and creditors, lawyers seize your money because I have used those methods myself. When you ask me to design your offshore asset protection plan, I do everything possible to thwart their efforts.

Second, I am an owner of a family business with $10 million in sales, which I actively managed as chief financial officer, general counsel and director for eight years. We were the target of an employee's lawsuit. It was only our second significant lawsuit in over 25 years in business. We had to pay this ex-employee a lot of money. (I'd like to give you details, but I am prevented from doing so because of a confidentiality agreement.) I quickly learned what mistakes we had made. And, I assure you, we corrected those mistakes and today are well protected because I set up offshore asset protection plans for each of the principal partners. I'll design your offshore asset protection plan to thwart lawsuits from employees and all other predator-plaintiffs.

Third, as general counsel for our business, I hired outside attorneys. When I was the client, I knew what I wanted and I knew when I didn't get it. Today, the service I provide for my clients is a direct reflection of what I wanted when I was on the client's side of the desk. I guarantee you'll be pleased with my ultra-personalized service -- no ifs, ands or buts.

Fourth, I have an M.B.A., plus I am a self-taught accountant. I can crunch numbers with the best of them. I bring an integrated approach to the planning process, taking into account your current business and tax situation and your estate planning goals.

Fifth, my fees do not reflect a penthouse office with plush carpeting and museum artifacts. Instead, my clients pay for my high level of knowledge, skill, judgment and experience -- not unnecessary overhead. What's more, you never have to worry about your sensitive work being performed by law students, associates, paralegals or secretaries because I do all your work myself.

Sixth, I'll help you even if you are already in trouble. Many lawyers won't.

Seventh, I have my own private investigator who checks out offshore professionals before I recommend them to a client. We run complete background checks and dig up all the details before we consider using their services. I know for a fact that many lawyers do not put forth this extra effort.

Eighth, I put protecting your interests ahead of protecting my own. I'm like the secret service: I'll jump in front of the bullet. Most asset protection lawyers force you to sign volumes of CYA paperwork. You wonder who they are more interested in protecting, you or themselves. I don't ask you for those protections. I work for you, not against you.

25."I've heard that for my plan to work, I have to give up control. Is that true?"

Yes, but you don't have to give up control as soon as you might think. I'm an entrepreneur and business owner and I want to control my money the same way you want to control yours.

Some asset protection lawyers insist that you give up all control immediately and place your assets into the hands of a trustee. I don't buy into this thinking and you don't need to either.

The time to transfer control of your assets is only after you've been sued. If you don't get sued for ten years, you keep full control of your money for ten years. If you get sued in the 11th year, then you transfer control to your emergency trustee. When the storm blows over, your emergency trustee returns full control to you. It's that simple.

Lawyers who tell clients to give up all control immediately are trying to placate the judge. They reason, if the judge sees that you transferred control after you were sued, it's obvious that you transferred control to avoid paying damages to the plaintiff. But this is obvious anyway because that's why you set up your offshore asset protection plan.

True, the judge will be irritated when he learns that your money is beyond his reach. This is because judges (like entrepreneurs, business owners and professionals) like to be in control. Since the judge is already upset because your offshore asset protection plan works, does it really matter that he's a little more upset because you turned your money over to a trustee after you were sued?

If he's upset, he's upset. BUT he still can't get his hands on your money. That's what counts.

You hire a good defense attorney who can make the lawsuit go away. And you can be sure it will go away much sooner when the
predator-plaintiffs and their lawyers learn that they can't get their hands on your money. Here?s the bottom line: The lawsuit went away, you paid very little to make it go away, and you still have your money.

26."Will you be available in the future if my advisors or I have questions?"

Certainly. Many of my clients ask me to provide annual maintenance on their plans. And, even for those who don't, I stay in touch with my present and past asset protection clients. As laws or circumstances change, I keep you updated and recommend techniques that will continue to provide you with the highest level of asset protection long into the future.

After I set up your plan, I don't pull the plug on our relationship. While you may have no reason to contact me, still, I invite your calls (or calls from your advisors) any time you have a question or concern. Whether now -- or ten years from now -- I'm only a phone call or an e-mail away. You can depend on it.

27."How much work do you do on my behalf?"

I offer complete asset protection services. This means I do everything. I design and create the plan that will best protect your assets. Then I implement the plan for you. When I'm finished, everything is in place and fully operational.

When you ask me to set up your offshore asset protection plan, I...

Identify your major lawsuit concerns and areas of risk.

Select the countries best suited to protect your type of risk and achieve your objectives.

Create and custom design the offshore asset protection plan to minimize your areas of risk.

Draft customized documents to create an international trust.

Draft all remaining customized documents.

Research and recommend prospective trustees.

Research and recommend local attorneys.

Research and recommend banks that offer the exact services you need.

Work with your CPA and estate planning lawyer to dovetail your new asset protection plan with your existing situation.

And, at your request, provide information on offshore investments.

Using international conference calls, I'll introduce you to my professional colleagues and contacts, and do whatever it takes to make sure you understand and feel comfortable with your offshore asset protection plan.

Also, at your request, I will even go with you to the protective countries and introduce you to my colleagues face to face. I'm happy to provide this service, but it is not included in my usual fee. If you?re interested, I'll quote a flat fee in advance so you know exactly what I charge. You can rest assured my fee for this trip will not be billed by the hour.

28."How much will it cost to set up my plan?"

If your financial portfolio is extraordinarily complex, your offshore asset protection plan could cost as much as $50,000 in legal fees. If your financial affairs are fairly straightforward, you could pay as little as $15,000 in legal fees. Most plans I set up are in the $15,000 to $20,000 range. I will provide you with an exact fee quote before you incur any cost or obligation.

In addition to legal fees, you will incur about $1,000 to $3,000 in various foreign government filing fees, registered agent fees, and other out of pocket set up expenses to properly set up your plan.

29."Who maintains my system, and what does annual maintenance cost?"

I offer yearly maintenance for your offshore asset protection plan. Once each year, I'll make all the necessary changes in your documents that result from changes in your family or business situation or changes in the law. I offer this service for a fixed annual fee ranging from $2,000 to $5,000, depending on the your plan's complexity. In addition, annual maintenance costs include trustee fees and fees of about $2,000 to $5,000 charged by the protective country to keep your trust and LLC active.

As you can see, you can protect tens of millions of dollars (and even more) for annual fees ranging from $4,000 to $10,000 per year. Clearly, this is much cheaper than hiring a law firm to protect your money from predator-plaintiffs and their lawyers.

Also, if you wish, you're welcome to ask your current business or estate planning lawyer to maintain your plan. I'll provide you with complete instructions you can pass along to your attorney. At your request, I'll even consult with your attorney, charging you a reduced hourly rate that I offer only to my asset protection clients.

30."When do I pay?"

You pay nothing until I design your plan on paper and present it to you for your approval. At that time, I will quote my fee for your customized asset protection plan. If you want me to proceed, I accept a deposit of half. The remainder is due when I deliver the completed documents to you. If you would rather pay the entire fee in advance, I offer you a ten percent (10%) reduction in my total fee, excluding costs. Whichever you prefer.

31."How does my system discourage lawsuits?"

Lawyers don't like to waste time suing you if you are judgment proof because they can't get their hands on your money. Your offshore asset protection plan makes you effectively judgment proof from decisions rendered by U.S. courts. As soon as the predator-plaintiffs' lawyers discover your assets are beyond their reach, their excitement and enthusiasm over suing you turn to frustration and anger. Like children, they may blow up in a temper tantrum. But they soon lose interest because they realize they can't always get their own way.

In an effort to save face, the lawyers will probably try to settle for a token amount so they can give their client something and get back some of their expenses.

But here's the bottom line: When you hire me to set up your offshore asset protection plan, you remain in control -- and you keep your money.

32."When can we start?"

Right now, if you like. Just fill in and transmit the confidential questionnaire. No one else will see it but me. I'll call you so we can discuss specifics. Then I'll set the wheels in motion so you protect your assets from the onslaught of predator-plaintiffs and their lawyers.

I can't guarantee that you will never be sued. I can't guarantee that you will never pay damages to predator-plaintiffs and their lawyers. But I can guarantee this: All of my experience, skill and heart will go into creating your offshore asset protection plan. And you can be sure that I will never provide anything less for you and your family than I have provided for my own. That's the only way I know.


Jim Bennett
Pirates of the Caribbean: Offshore Traps
Global Village Idiot's Guide

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