Offshore Asset Protection Trusts for US Citizens
When it comes to discussing offshore anything and US citizens - from offshore trusts to investments, from offshore banking to company incorporation - it's important to note the following facts: -
- US citizens are taxed on their worldwide income. This includes income from interest, dividends and gains whether onshore or offshore.
- The US government allows money and assets to be moved offshore freely; however it requires full disclosure relating to the amount of money or assets moved and when they are moved.
- The US government has task forces committed to the prevention of money laundering and tax evasion.
- The US government makes it clear that US citizens must comply with all reporting and taxation demands.
So, does this effectively render the offshore world inaccessible or at least useless for US citizens?
No, far from it in fact!
The utilization of offshore trusts and bank accounts can be an excellent way for US citizens to legally and securely protect their assets and themselves from litigation for example.
Offshore trusts offer an individual a fair degree of personal confidentiality, privacy and asset protection from claimants such as an ex-spouse or business client for example; and if properly structured, offshore bank accounts can offer degrees of financial protection from potential future claims as well.
There are many companies and individuals who claim to be able to offer US citizens offshore solutions for taxation reduction or negation purposes. The bottom line is - as stated previously - US citizens are taxed on worldwide income. Therefore it is at best unlikely that the services being advertised will apply to a US citizen and at worst the opportunity will require the US citizen in question to break the law.
So how can offshore asset protection trusts potentially benefit US Citizens?
Any form of asset protection trust - whether onshore or offshore - can be used to protect assets from personal or professional litigation or creditor attack.
Whether established in an offshore jurisdiction or not, most assets protected by the given trust for a US citizen can remain in America. The assets usually remain under the indirect control of the Settlor (the person establishing the trust) as well.
Such a trust will usually be 'irrevocable' for a set term, and during that period the settlor will not be a direct beneficiary of the trust.
Depending on circumstances and best advice, many US asset protection specialists favor structuring offshore or foreign trusts in such a way so that they are taxed as domestic grantor trusts.
If the trust is created properly, any creditor or anyone suing the settlor will be unable to reach or claim the assets within the trust.
If the offshore asset protection trust has been structured as an irrevocable trust for a set term, at the end of the term provided there is no current or ongoing threat, the assets can be returned to the control and direct 'ownership' of the settlor.
Conclusion
When it comes to the utilization of offshore solutions there are circumstances in which US citizens can benefit from properly structured offshore solutions.
At all times US citizens must be aware that it is their legal duty to comply with American taxation and reporting requirements.
The purpose of effective offshore asset protection planning is the negation of any economic incentive to sue.
Rhiannon Williamson is an experienced publisher who has produced articles for leading travel and tourism guides and financial magazines. Her specialist knowledge about both travel and finance gives her site Shelter Offshore the unique ability to literally cover every single aspect of moving & living abroad - including the often less discussed offshore tax advantages that can be available when leaving our homeland. Check out her website to find out how you can escape from the rat race, relocate overseas, and profit from your move!
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 The Money Times | Ackermann says credit crisis end in sight Financial Times, UK - Josef Ackermann, Deutsche Bank’s chief executive, on Thursday said the credit crunch was at “the beginning of the end” as banks and regulators have taken ... 2nd UPDATE: JPMorgan 2Q Net Down 53% On Credit Woes, Markdowns JP Morgan: The Legacy of the Credit Crunch Why No Outrage? |
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Dollar Rebounds From Record Versus Euro as Credit Turmoil Eases Bloomberg - The US currency also rose versus the yen on signs US investment banks will withstand credit-market losses and the Federal Reserve and the Treasury proposed ... |
 BBC News | Credit crisis: Merrill Lynch to sell Bloomberg stake and keep HQ after Tehran Times, Iran - The loss was due to write-downs of $9.4bn on the value of mortgage holdings, credit-related derivatives and instruments guaranteed by crisis-hit monoline ... Merrill Drops After $4.65 Billion Second-Quarter Loss (Update2) Quarterly loss at Citi smaller than expected, but Merrill disappoints BlackRock shares soar on earnings, Merrill stake move |
$10m W/Bank Credit: Boom time for small-scale mining The Punch, Nigeria - This was the scenario, which the World Bank set out to help Nigeria change in 2005 when it granted the country $120m credit under the Sustainable Management ... |
Mortgage sales pressure fuelling credit crisis: ACTU ABC Online, Australia - The Australian Council of Trade Unions (ACTU) has accused banks of fuelling the credit crisis by forcing staff to push mortgages onto people who cannot ... Banks 'pushing' families into debt Banks lean on staff to push loans |
No deals for debits at the pump Detroit Free Press, United States - I would have paid the same price if I used a credit card. Bring the Benjamins and you'd get that super-low price -- OK, low by today's standards -- of ... Gas stations turning to using 'gift |
Teton County development plagued by credit crunch Fox 12 Boise, ID - Developer Bill Reid said a nationwide credit crunch prevented him from winning more financing for the 1350-acre Huntsman Springs project. ... |
Deals and takeovers are being done despite the credit crisis Telegraph.co.uk, United Kingdom - So, tapping the credit market for a cool £10bn to finance the acquisition of companies such as Alliance Boots or J Sainsbury is simply out of the question ... |
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