Warning: You’re Losing Money by Not Doing Offshore Asset Protection Planning

Did you know that in the US, a new lawsuit is filed every 30 seconds on average? Perhaps the statistics in your jurisdiction are better than those in the US, but still, if you’re not careful, you’re risking your assets to lawsuits — and many other risks. The problem is, the risks cost you money. Plenty of it.

Now, here’s the thing: An average person allegedly doesn’t take asset protection seriously. He or she seems to take vacation or holiday planning more seriously than asset protection planning. This is a serious problem which is made worse by the mass media, amplified by the social media.

We think that it’s time for you to have the right mindset about your asset, and take several minutes of your time reading the following paragraphs, shedding some light on the issues you should be aware of — for the sake of your financial future.

What is asset protection?

Let’s start with this: What is asset protection, anyway? Well, in a nutshell, it’s an activity of protecting your assets from the prying eyes. “You” here can be an individual or a business entity “The prying eyes” here can be lawsuits, creditors, bad family members, bad competitors, or even your government.

Asset protection works by adopting legal techniques and laws, which enable you to protect your hard-earned money. Legally.

While such techniques and laws are often adequate, you may want to enhance your protection by incorporating offshore jurisdictions in your overall plan. This leads us to the following section…

Why offshore?

The thing with your home country is that you’re bound by the available laws and suitable legal techniques. Otherwise, you’re breaking the law by evading taxes or adopting illegal accounting techniques.

Here’s a solution to that: Go offshore.

Using the right offshore structures in the right offshore jurisdictions can offer you adequate asset protection. While doing so might not make you invincible or invisible, you certainly make things much harder for those who want to gain control over your assets.

In fact, you’re losing money if you’re not protecting your assets offshore. How so?

1 — Tax is robbery — or theft

We’re not trying to be provocative or political, but we agree with the experts who argues that taxation is theft. We believe that we should be going to a place where we’re treated fairly — including in taxation. While not paying taxes shouldn’t be in any asset protection agenda, being taxed unfairly surely loses you money.

The thing is, “taxation for the benefits of all” is noble in theory but lousy in practice. Sure, roads and other public services are funded by your tax money, but the question is in term of usage; how much of your tax is used for the greater good? Are you truly taxed fairly? Only you can answer that. Read these arguments between the pros and cons regarding the “taxation is robbery” statement.

Going offshore allows you to choose the jurisdictions that tax you fairly, which mean that the jurisdictions’ tax laws are in favor of asset holders — which usually also means lower taxation under certain arrangements.

2 — Putting all eggs in one basket is dangerous

The golden rule of investing is diversification. You should put your investment eggs in several baskets, spreading the risks while aiming for better results.

In asset protection, the rule is pretty much the same: You shouldn’t protect your assets just in your home country. When things go wrong with your home country, your assets can be rendered inaccessible. Remember Greece? Or Venezuela? Instead, protect your assets in a jurisdiction that has a stable political and economic condition.

3 — Protect your wealth — from you

The funny thing with human psychology when it comes to money is that when you make more, you end up to spend even more. That’s why some successful professionals go bankrupt.

As some of us don’t have adequate self-control when it comes to money, there is one way that works in both personal financial management and asset protection planning: You can’t spend what you don’t see; therefore, set up a system or scheme which lets you set aside a portion of your income or earning for investing and wealth building purposes.

If you want to take it to the extreme, put that portion of your money in a trust fund, and set it in such a way that you can’t get your hands on it. In legal eyes, your money in a trust fund is not yours anymore.

4 — Political and economic woes lose you money — and even freedom

This is the last in the list, but arguably the most important one — simply because not many are well aware of the implication of adverse political and economic situation of the country you live in. Indeed, you can do all the right thing in asset protection; but with your assets located in your home country, you put your assets at risk.

Consider this: What would you do when the economy of your country collapses? More often than not, your government will impose capital control, which basically limits your access to your very own assets. In another scenario, what would you do when the political turmoil hits your country — typically in an election period? Let alone your assets, but what about your personal safety and freedom? While moving overseas might be possible during such scenario, how would you fund your life overseas, when all of your assets are in your home country?

And yes, don’t expect your government to take care of you when things go wrong.

As always, this article’s purpose if informational only. If you want solid advice, contact your trusted consultant and/or attorney.

That said, your task today is to find the right consultant and attorney who are well-versed with offshore laws and regulations.