Why International Protection Is Better
You get the best protection when your assets are international for several reasons:
First, asset protection jurisdictions won't recognize or enforce U.S.
judgments. You have jurisdictional immunity. Of course, no foreign country
can ignore every legal order from another country; some countries won't
enforce US civil decrees. These are the countries we use for lawsuit protection.
Because these protective countries won't enforce an American judgment
or civil decree, the creditor must re-litigate their case within that
foreign jurisdiction. But, this is often impractical, if not impossible.
For example, the statute of limitations to commence suit within that jurisdiction
may have expired. Or the international financial center may not recognize
the plaintiff's underlying liability claim. The best international
financial centers impose other procedural obstacles to effectively block
creditors and litigation. Asset protection jurisdictions are debtor-oriented.
They try to protect their customers' wealth because wealth protection
is their business.
These asset protection jurisdictions have special laws that allow you to
form unusually protective asset protection structures and entities within
their country. International asset protection trusts, limited liability
companies, limited partnerships, foundations, captive insurance companies,
international business companies, and hybrid companies are examples. Each
entity, in its own way, gives you far more protection than you could obtain
through a comparable U.S. entity.
Finally, asset protection jurisdictions are also great privacy havens.
Though, keep in mind, a good privacy jurisdiction is not always a good
asset protection country.
The ultimate advantage from international protection over domestic protection
is that assets fraudulently transferred to a U.S. entity would be easily
recovered through the U.S. courts because the U.S. courts have continued
jurisdiction over these assets. An American court has no jurisdiction
over international assets. This explains why your international assets
are better protected than U.S.-based assets which remain susceptible to
fraudulent transfer claims and other creditor challenges that could be
enforced through the U.S. courts.
You never know when someone will sue you on a past claim. Your asset protection
plan must withstand a potential fraudulent transfer claim. In many instances,
a creditor can persuasively argue that there was a fraudulent conveyance.
You avoid this vulnerability and uncertainty with your money internationally.
IFC's can give you enormous debtor protection. Few creditors can overcome
the many legal and procedural obstacles. We mentioned their short statute
of limitations. For example, an international lawsuit must usually be
filed within two years from when you transferred your assets internationally.
Few creditors file such a timely challenge to an international transfer.
Another obstacle is that your creditor must prove beyond a reasonable
doubt that your transfer internationally was fraudulent — an extremely
difficult standard to prove. There are other obstacles. Nevis is a particularly
good asset protection jurisdiction. They require that a creditor post
a $25,000 cash bond to cover the defendant's legal fees before the
creditor can commence litigation. Another roadblock: the creditor must
retain Nevis counsel on a fee-only basis, not a contingency arrangement.
A more formidable procedural obstacle is that an American creditor with
a U.S. judgment must nevertheless re-litigate their case within that international
jurisdiction − and win a judgment from their courts − before
the creditor can attempt to recover a fraudulently transferred asset.
And the creditor cannot re-litigate the case unless the claim follows
rules of liability recognized by that country. For example, your creditor
probably could not file discrimination or one of the many other lawsuits
that are based on American law. If so, the creditor cannot re-litigate.
Still, other requirements effectively filter most prospective claims against
a defendant's international assets. While no worthwhile asset protection
country would completely disregard fraudulent transfer claims, these financial
centers can and do make it exceptionally difficult to pursue such claims.
Another formidable obstacle facing a determined creditor who attempts to
recover your international assets is that your trustee can relocate your
international assets to yet another trust or protective entity in another
haven. The creditor must then start new legal proceedings in that IFC.
This flee provision is found in most international trusts. Creditors can
tire from the chase as you continuously move your assets between countries
and structures. This flee provision, or Cuba clause, is only one more
of the many powerful asset protection provisions found in any well-drafted
international trust. Other provisions can effectively deprive your creditor
of any practical opportunity to seize your international assets.
These barriers to recovery explain why fewer than 3 out of 100 judgment
creditors even attempt to recover international wealth. And these few
cases are usually settled for pennies-on- the-dollar. Without international
protection, these creditors would undoubtedly have recovered considerably
more. The fact that 97 out of 100 creditors won't attempt to seize
international wealth strongly endorses the IFC's protective powers.
Many a creditor has the legal right to recover international assets as
a fraudulent transfer, and yet this same creditor won't attempt recovery
only because it's impractical. A creditor can spend enormous legal
fees and recover nothing, though the creditor has the legal remedy. International
asset protection makes it impractical for all but the most determined
creditor to pursue their claim. A creditor's legal recourse indeed
becomes academic when your creditor won't assert this remedy.
YES, YOU CAN LOSE EVERYTHING!
You may think that your wealth is safe and that you don't need protection.
But don't delude yourself and accept reality —
for every 60 minutes you spend making money, spend 60 seconds thinking
about how to protect it!