Avoid Fatal Errors
For your international trust to be effective, it must be correctly structured and administered. Several celebrated cases have illustrated that international trusts can fail. Those few cases highlighted fatal planning errors that you must avoid.
- Don't retain control. If a U.S. court determines that your trust is only a sham, you'll lose your protection. Your trustee must control your trust both in form and in practice.
- Keep your trust assets international, not within the United States. Trust assets located within or tied to the U.S. can be seized by a U.S. court if your transfer to the trust is fraudulent.
- Your trust must include every protective safeguard. A trust that is improperly drafted can be technically defective. You need a trust prepared by an experienced professional.
Timing and relinquishing control over your assets are both vital to international success. Don't wait until the last moment to protect yourself. Set up your international entities before you incur liability, and certainly before you are sued. Nor should you control your trust, or the court may conclude that you can repatriate your money and force you to turn over the money to your creditor.
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!