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America is in the midst of a litigation explosion. More than ninety percent of all lawsuits in the world are filed in the United States, with a new lawsuit filed every thirty seconds.Many business people and professionals fear the loss of their hard earned money through lawsuits stemming from a mistake or even an unfortunate or unavoidable accident. These lawsuits can take away a life's savings. Often insurance may not cover all or even part of the claim. An International Business Company and a Foreign Limited Liability Company could well be the answer to protecting your assets from all types of creditors and could help to ensure a bright and financially secure future for your family.
Asset protection planning is the use of advanced planning techniques which place one's assets beyond the reach of future potential creditors. In our consultation, it does not involve hiding assets, nor is it based on fraudulent transfers or tax avoidance. Prudent planning might include a combination of asset protection planning with liability insurance.
The traditional goal of the estate planner has been to assist his clients with the testamentary disposition of his assets in the manner he or she desires. It should also include educating the client regarding available options as well as the design and implementation of a plan to achieve these goals, with the full knowledge of the client's attorney or tax advisor. This has been seen by the estate planner as a way to protect his client's assets for the benefit of the client's family following his death by reducing inheritance or death taxes and avoiding delays. A properly structured asset protection plan expands this to include protecting the client's assets for his own benefit during his or her lifetime.
One of the best known vehicles for offshore asset protection and even for international investing is the International Business Company or IBC. This type of company is relatively simple to incorporate, flexible and inexpensive compared to its potential advantages. An IBC can engage in any activity that is lawful.
Foreign jurisdictions and offshore banking privacy laws can provide excellent and legitimate estate planning with asset protection opportunities. In most cases, the International Business Company, IBC, is used in conjunction with a Foreign Limited Liability Company, FLLC. Two main reasons for such a program is asset protection from litigation and estate planning. The FLLC is formed in a jurisdiction such as Nevis and the IBC is formed in Nassau, Bahamas. A typical program would be the IBC controlling 1% of the FLLC as General Partner. The US resident usually owns the remaining 99% as a limited partner. The estate planning is through the usual LLC estate value discounts. The asset protection is through the various privacy laws in foreign jurisdictions and the inability to sue a foreign IBC or LLC on a contingency basis or from US soil.
As soon as the IBC and the FLLC are formed, a form 8832 is filed. This is an Entity Classification Election which notifies the IRS that we want the entity considered a corporation for legal purposes and a "disregarded entity" for tax purposes. We also file for a US tax identification number for the FLLC.
Most people use an Asset Protection Plan to protect their assets from economic uncertainty and as a shield against unexpected lawsuits arising from their professional and personal lives. It was written recently in an offshore publication that a survey conducted in the United States revealed that participants rated a lawsuit as the second best way to strike it rich. The first was winning a lottery and the third was an inheritance. This tremendous increase of litigation in America has caused people to look wherever possible to protect their hard earned assets. With more than one hundred million active lawsuits presently in our court system, is it any wonder that those with property are getting nervous?
The information provided in this article has been written in plain and simple language to make it understandable to a wide range of readers. The laws underlying an International Business Company, Foreign Limited Liability Company, as well as any "offshore" Asset Protection Plan may vary differently with each foreign jurisdiction. We highly suggest you talk with a qualified tax advisor before implementing any program.
Asset Management, Inc.
U.S. # 864-675-1571
A graduate of the University of South Carolina, William Davis is the owner of Asset Management, Inc. He received his designation as a Certified Estate Planner from The Liberty Institute and is a member of the National Council of Certified Estate Planners. Davis was named to the National Registry of Who's Who for his work in estate planning and wealth management. He is a Registered Advisory Associate and conducts public seminars for his Firm and for other groups such as colleges, charitable organizations, accounting and CPA continuing education meetings and for financial institutions.
Please be advised that neither Asset Management Inc. nor any of its agents give legal or tax advice. This information has been derived from sources which we believe to be reliable but has not been independently verified by us. The opinions expressed herein reflect our current judgment and are subject to change without notice. We recommend that you consult with your tax advisor and attorney for complete details before making any final decisions.
Securities Offered Through Mutual Service Corporation, A Registered Broker/Dealer - Member NASD and SIPC
Asset Management, Inc. is not affiliated with Mutual Service Corporation.
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