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The Offshore Asset Protection Trust as a Deterrent to Litigation

The Offshore Asset Protection Trust as a Deterrent to Litigation

The most important benefit of a well designed offshore asset protection trust is the one no one is talking about. We get all caught up in the law and the complex cases cases and miss the most basic and important benefit of an offshore asset protection trust: the fact that an international trust acts as a deterrent to litigation. You can setup an offshore company fairly easily and it is truly in your best interest.

A complex offshore structure can prevent a lawyer from taking a plaintiff’s case, or cause them to settle for the nuisance value, because they know it will be near impossible to collect on a judgement.

That is to say, the most valuable component of your offshore asset protection trust is that it can prevent a case from being brought. That’s especially true in frivolous litigation or cases taken on contingency.  Lawyers will do whatever their client instructs if they’re getting paid by the hour. They will do whatever is in their best interest if they’re on contingency.

Think about this. There are 15 million civil cases filed in the United States each year. Of those, about 97% are dismissed or settled. If the plaintiff can show even the most basic injury or cause of action, and get past summary judgement, he and his contingency fee lawyer will get paid.  

However, if the defendant’s assets are protected in an offshore trust, this plan gets turned on its head. There is no reason for you to pay up to avoid the risk of a trial when you know the litigant can’t get to your cash. In fact, you might allow the case to go to a default judgement (and not pay any legal fees) if you know your assets are bulletproof.

The plaintiff knows they won’t get a big payday. Thus, they’re more likely to settle for pennies on the dollar… the nuisance value of the case rather than the risk assessed value of the case. A settlement facilitated by your offshore asset protection trust with you spending near zero on lawyers.

Next, 80% of the world’s lawyers are in the United States. Of new graduates, about 50% of them will find jobs at law firms. The rest are left with big time school loans to pay and no possibilities except to put up a shingle and chase ambulances. The system is putting out about 300,000 lawyers per year, so 150,000 starving newly minted lawyers ready to file any case that comes along.

These attorneys living in their parents basements will take any case. And, because court costs are minimal in the United States, they can take them on contingency. However, when it comes to enforcing a judgement in a foreign jurisdictio,n or collecting from an offshore asset protection trust, they’re lost. They can’t afford to continue and they can’t fake it and hope they get a friendly judge… there are no friendly judges in the top asset protection trust jurisdictions.

Because an offshore asset protection trust can prevent a case from being brought, or force a settlement for pennies on the dollar, they are strong deterrents. Once a plaintiff’s lawyer finds out he has no shot at a big payday, he will do anything necessary to get out of a contingency case as quickly as possible.

Sure, a well designed asset protection trust will protect your assets from the most aggressive and well funded future civil creditor. So long as your offshore trust is funded well in advance, no one will be able to break it down and access your assets.

And it’s these well funded and litigated cases that make the headlines. But, behind the scenes, cases are dropped or settled every day because of the the offshore asset protection trust is a strong deterrent.

This deterrent factor will save you the time, money and aggravation of defending a frivolous case. It will also allow you to settle on your terms, knowing full well that the lawyer can’t collect if he get’s a judgement in a U.S. court.  

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For these reasons, the deterrent factor is often more important that the more advanced features of the international trust. All of those legal terms of art that get thrown around mean nothing if the case is never brought.



By future civil creditor, I mean a creditor with a cause of action that arose after you funded your trust. Sending money offshore after the harm occurred is never a good idea and can be reversed by U.S. courts. Asset protection is all about building a solid plan to protect your family from future creditors… putting up barriers that no one can breach.

By civil creditor, I mean to say that an offshore asset protection trust is not intended to protect your assets from the U.S. government (especially the Internal Revenue Service).

I hope you enjoyed this article: The Offshore Asset Protection Trust as a Deterrent to Litigation.


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