Asset Protection

    Because of the litigation explosion in the U.S. and elsewhere, professionals and small business owners are forced to focus on ways to protect their savings, investments and other accumulated assets that may be attractive targets for hungry trial lawyers.

Facts to Consider

• Each year in the US, approximately 45,000 new lawyers pass the bar.
• There are approximately 19 million new lawsuits filed each year.
• 1 in every 3 businesses is sued each year.
• Those with retirement savings are visible targets for frivolous lawsuits directed at "deep pocket" defendants.
• Business owners face a constant threat of lawsuits from employees, lenders, customers, suppliers, landlords, competitors and partners.
• Property owners are endangered by potential lawsuits from tenants, visitors, lenders and buyers.
• Attorneys, physicians, CPA's, engineers, real estate brokers, contractors and all other professionals are concerned with litigation from malpractice claims and business disputes.

A lawsuit, justified or not, can wipe out a lifetime's worth of work and savings.

     In the U.S. Legal System, the deck is often stacked in favor of plaintiffs and against defendants. Because this observation encourages the filing of spurious lawsuits, the average business owner or professional may be sued several times during his or her lifetime, thereby facing the possibility of being on the receiving end of a ruinous judgment. Failure to plan for such a situation can result in the instant loss of a lifetime's accumulated wealth. Once a lawsuit has been filed, or one is anticipated, the U.S. Legal System will not allow assets to be moved.

YOU MUST ACT BEFORE THAT THREAT APPEARS!
What can you do?

Limited Liability Company

     The Limited Liability Company ("LLC") is a fairly new type of entity. It has been around only about ten years in most states.
     Here at the Law Offices of Jay A. Rose, we use the "Family LLC" as the first line of defense. This special LLC allows only members of the family to own assets in the LLC. By placing the assets in the LLC, judgment creditors are precluded in most cases from taking the actual assets. They are limited by what is known as a "charging order" to distributions of the Family LLC, if there are any.
     Domestic Asset Protection Trusts are trusts that are created in certain states of the USA that permit you to be the beneficiary of your own trust. You place your assets irrevocably into the trust and the trustee then makes distributions to you. These are recommended only in limited cases.
     For those who want the ultimate protection available, Offshore Asset Protection Trusts can be used to provide a high degree of asset protection. Common offshore jurisdictions for these types of trusts are:

• Bahamas • Bermuda • Turks and Calicos Islands •
• Cayman Islands • Cook Islands • Gibraltar • Isle of Man •

These jurisdictions provide a legal structure favoring those who set up trusts in their countries.

     In establishing a foreign asset protection trust, your assets are transferred to the trust that has only foreign trustees (with no offices or agents in the United States), which manages and administers the trust property from the offshore jurisdiction. When your creditors begin looking for your assets they will have a very difficult time finding them because of the high degree of privacy these trusts ensure.  Even if they discover the offshore trust, they will have to deal with the foreign trustee.
     Creditors quickly find that they have no power over the foreign trustee, since the foreign trustees do not respect (are not obligated to honor) judgments from the United States.
     Commonly, judgment creditors are quick to then seek a fast and cheap settlement of their dispute.  Some will not even bother to file the lawsuit since there are so many barriers to recovery.