Trusts and asset protection remain among the most misunderstood topics in international wealth planning. While trusts can be highly effective tools for estate planning, succession planning, and asset protection, they are often marketed as solutions to problems they cannot solve.
The topic has become increasingly relevant as more professionals, entrepreneurs, retirees, and internationally mobile families accumulate assets across multiple jurisdictions.
Questions surrounding trust structures, tax reporting, creditor protection, and cross-border succession planning are no longer confined to ultra-high-net-worth individuals.
The article below originally appeared on Inc. Magazine, where I examined some of the most common misconceptions about trusts, how the asset protection landscape has evolved, and the factors expatriates should consider before establishing a trust structure.
I’ve reproduced an excerpt below.
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Why Is Asset Protection Important?
Before discussing pure asset protection, know that some expats want to “kill two birds with one stone,” achieving asset protection, investing success, and succession planning in one strategy.
For instance, if you die as an expat, probate can take years in your home country and even longer if you have assets in numerous countries.
If an insurance company owns your asset, or a trust owns assets in an insurance bond, the process of passing down your assets to loved ones is easier, compared to owning them directly yourself.
This is because you can add named beneficiaries to your account with insurance providers. Your beneficiaries can usually get the money without going through probate in this situation.
Any solutions which can shorten the probate period is worth its weight in gold. If you can do it alongside protecting your asset, then all the better!
Going beyond the probate issue, shielding assets from creditors and divorce can be a key objective for wealthier people.
This is one reason why trusts in the Cook Islands and Nevis are popular, because they don’t accept foreign judgements and require re-litigation in local Cook Islands courts.
This structure worked well for decades until the Common Reporting Standard (CRS) came along.
Continue Reading
The full article explores:
- How the Common Reporting Standard (CRS) changed offshore asset protection
- Why some traditional trust structures have become less effective
- The relationship between privacy and asset protection
- Alternative approaches used by some international investors
- Why asset protection strategies must be tailored to individual circumstances
This article originally appeared in Inc. Magazine.
Read the complete article here:
Trusts and Asset Protection Strategies for Expats (Inc. Magazine)
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.