Importance of Asset Protection
Significance of Asset Protection
All assets and properties are hard-earned and they deserve to be protected. Earning wealth is very important, but learning to protect the assets earned is far more important. If you don’t know how to protect your assets, you may eventually lose your assets. Everyone earns money to acquire assets, and the way you protect your assets is essential. The greatest threats to your assets are taxes and lawsuits. You need to know how to fight against these two threats so that your assets are protected.
To begin with, you need to learn ways to minimize taxes on your assets. You should also learn how to protect your assets from lawsuits. You don’t have to resort to illegal methods to do this, as every asset owner has full rights to protect his assets in every possible legal way.
When you own a property or operate your own business, you are risking your money. You need to find ways to minimize the financial risks. This is important, because lawsuits are filed against property owners every two seconds each day. Even though you hope that your property will not be affected, it is important that you learn ways to protect your assets so that you are always ready for that possibility. Established business assets need to be protected from frivolous lawsuits.
If you operate a business, then any judgment made against you personally may also affect your business assets. You may be sued for personal debts and actions outside the particular business. If you have problems with your partner and if the partner successfully sues, your assets are at risk. They can be easily jeopardized if you haven’t protected your assets. When the judgment creditor seizes your business stocks, you will eventually lose the equity in your business. Moreover, the creditor may well become the major shareholder.
Judgments against businesses are very common these days. Suits for business operators are sued directly for the debts and actions of business owners. Breach of contract, intentional act of business employers, and many other scenarios may result in the seizure of your assets. A judgment against the business may result in the seizure of all the assets of the business. Everything, including real estate, inventory, equipment, leasehold improvements and accounts receivable may well be taken. At the end, you may be left with nothing.
There are several legal ways to protect business assets. You can secure debts against the assets, such as a mortgage or business line of credit. As long as you pay your debts, your assets will be protected. You can use anything like real estate, equipment, or inventory as a security for your debt. Judgment creditors can’t seize properties that are under a mortgage. When creditors want to take over those assets under mortgage, they have to pay off the full balance of the loan before they can acquire the assets. Whenever you operate a business, make sure that you have formed some sort of corporate shield that protects your business.
Advantages of Asset Protection
A successful asset protection strategy is an international strategy that:
- analyses your current situation, addresses all its relevant factors, and takes into consideration your short-term and long-term future plans;
- protects your confidentiality;
- involves foreign corporate structures with nominee services and/or fiduciary services;
- provides effective tax optimization solutions;
- ensures asset value maximization;
- maximizes profits and returns on your assets; and
- provides the opportunity to work with a foreign banking institution with internet banking access.
You may wish to relocate to a foreign country, and your asset protection advisor should be able to provide you with professional advice and local assistance for this purpose.
It is likely that you have your own ideas on how you would wish to implement your asset protection strategy. However, we recommend that you are open to new suggestions, as your fiduciary may have more-complete knowledge on the actual opportunities and may advise you to adopt a more innovative and advanced solution that will ensure a higher level of protection against third-party threats.
Your fiduciary should be able to provide you with 360-degree assistance in planning, implementing, managing, and developing an asset protection strategy that will be constantly updated if certain changes in international business environments take place and must be addressed. Having chosen the right asset protection expert means that you no longer need to worry about the safety of your assets, but you may want to be kept up-to-date on their current situation and further developments in real time as well as be assured that you and your assets remain safe from direct and indirect threats.
The Importance of Proactive Asset Protection
Asset protection is somewhat like laying down the rules to a game you are not even sure you will end up playing. It allows you to place certain limits on what is considered to be “fair game” should you become the subject of a lawsuit, bankruptcy or collection proceedings. While many people convince themselves that these things simply won’t happen to them, engaging in proactive asset protection is the best way to ensure that, if the worst happens, you stand a fighting chance of keeping all assets intact.
For those who choose not to engage in asset protection planning, the rules tend to greatly favor the other side.
Asset protection is most commonly used in fields where there is a high likelihood of getting sued. In this day and age, there are not many medical professionals, real estate investors or corporate leaders who do not have some type of asset protection plan in place. However, the unfortunate truth is that the most devastating lawsuits are leveled at those who never saw it coming. If you have anything to protect, you should absolutely take steps to protect it, regardless of your profession or how much people like you.
Waiting for a lawsuit or claim to arise before engaging in asset protection is similar to waiting until you’re in an auto accident to fasten your seat belt. There are many effective tools at your disposal before a claim is filed, but afterward your options narrow considerably.
In fact, scrambling to put together some form of asset protection after a claim has been filed often leads to subsequent and more serious charges. That’s because making a fraudulent transfer is one of the most common mistakes people tend to make after the fact, and it can have serious legal repercussions. Asset management plans that rely on secrecy or relaying incomplete or falsified information to the court can cost you dearly, and even land you in jail.
It’s generally understood that during a collection, lawsuit or bankruptcy hearing, every aspect of your personal and professional holdings will be laid bare before the court, which underscores the importance of consulting with a professional to handle your asset protection planning. Everything from a complete listing of your assets to a detailed history of your transfers and international tax planning are going to come under harsh scrutiny. Hiring a tax planner who can provide a thorough and comprehensive asset protection plan is often the best course of action. This reduces the number of individuals involved and allows you to paint a clearer picture to the court, should the need arise.
The most important lesson to consider is the need for advanced preparation. If you don’t have a good idea of the state of your asset management and how it will be viewed in the event of a lawsuit, your assets are not adequately protected. To set your asset management on the right course, work with an international tax planning professional before you need it.
Risks in Asset Protection
asset protection risksWe have already underlined many times that an effective asset protection strategy must be fully customized. An effective strategy for one entity may not necessarily be right for another person or company. An asset protection strategy must take into consideration the type and value of your assets and your country of residence, age, family status, plans for the future, and income streams.
Firstly, it is necessary to remember at all times that if someone tries to “sell” you an asset protection strategy without understanding and carefully analyzing your situation, it will most probably end up creating problems for you and involve additional unnecessary expenses. Moreover, you must be extremely cautious if they insist that theirs is the most effective strategy and will work for everyone. This will not be the case. One single ideal asset protection strategy simply does not exist, and each must be created according to the individual needs and objectives of every client.
An asset protection strategy must first of all defend you from the most probable sources of threats. This is where the professional analysis and advice of asset protection experts is a must, as there are more sources of threats than may initially appear to be the case, and an effective asset protection strategy must involve defense against all of them. Asset protection is therefore a method of protecting against all legal risks.
The cheapest asset protection strategy offered to you is not always the most effective solution. Neither do you always have to spend a fortune on implementing a customized asset protection scheme. However, keep in mind that an effective asset protection strategy is fully customized, needs a significant amount of time for the analysis and evaluation of your situation, and requires in-depth international legal and business expertise. This means that an effective asset protection strategy that will guarantee your confidentiality and defend you from legal threats cannot be as cheap and fast as is suggested by today’s so-called experts, who tend to disappear from the market as fast and unexpectedly as they appear.
The main objectives of asset protection planning are not only to predict how judges, authorities, or private entities would act in particular circumstances, but also, and more importantly, to avoid relevant issues coming to court and to ensure that your privacy remains protected at all times.
Common Mistakes in Asset Protection
One of the most common mistakes in asset protection planning and implementation is an attempt to adapt the same asset protection strategy to different situations. This is unquestionably a mistaken approach, as the opposite is required: it is essential to analyse each situation and to create a completely innovative and creative action plan that corresponds to your objectives and current situation, including monthly income, retirement plans, age, family status, and future projects.
An important factor to remember in asset protection planning is the necessity to be knowledgeable about laws and taxation practices concerning gifts and inheritance in various countries. It is possible to avoid paying large sums on taxes in a fully legal context when transferring your property to your friends or relatives, if the transaction is structured in a due manner in the most appropriate jurisdictions.
Today, almost everyone knows that it is better to register a property in a company’s name rather than in their own names as private individuals. Yet, although this assumption is absolutely correct, incorporation and management of an offshore company may not be enough for this purpose. Firstly, not all offshore structures are suitable for asset protection purposes. Secondly, some offshore jurisdictions are not able to provide a desired level of confidentiality. For example, they may have signed information exchange treaties with an extensive number of countries that would require the local authorities to reveal information on and the identity of an offshore company’s beneficial owner upon an international request.
Some corporate services agents may have material interest in a particular jurisdiction and thus advise all their clients to create offshore structures in one particular country. CS&P works, without intermediaries, in more than 80 jurisdictions around the world and places its clients’ interests above its financial profits at all times. We strongly follow our ethical code of conduct, and our aim is not to sell you a particular company in any way. What we do is establish a long-term relationship with you and use all our knowledge, creativity, and experience to offer you innovative and highly competitive solutions.
Confidentiality in Asset Protection
These days, plenty of information on the offshore world and offshore services is available through the internet and other mass-media sources. Unfortunately, a significant amount is wholly misleading. Some websites try to “sell” offshore companies like they are supermarket products, which of course is not only ineffective but even harmful to your business and wealth. As a result of such misunderstanding and thus misuse of offshore structures, journalists present the offshore business world as fraudulent and evasive. But the reality is completely different as long as an offshore structure is incorporated following all the offshore jurisdiction’s rules and laws and is administered correctly in the long term.
Confidentiality is one of the most important elements that entrepreneurs look for today. In the majority of cases, a duly structured offshore company, trust, or foundation can provide a high level of confidentiality and thus be a solid basis for an effective asset protection strategy. If local and international authorities or private organizations tried to investigate your wealth situation for any reason, it would be difficult if not impossible for them to proceed when all your assets are being kept in a fully confidential way.
It is important to choose a professional fiduciary who can provide you with a full set of services necessary for your personalized asset protection scheme. Preferably, the consultant should be an international company able to keep all information on your case in a jurisdiction different from your country of citizenship and residency. In addition, the company should demonstrate that it has an organizational design that will ensure communication between you and selected company staff members only and that information on your case will be available only to them. A professional fiduciary should provide you with a full report with all provisions in place that guarantees your confidentiality and ensures that your case is managed with the maximum security and care.
You should also take several simple precautions that at a future date will be vital for your confidentiality. Telephone is not the most secure way of communication nowadays. It may be effective to use separate email addresses for separate business deals. It may also be useful to have the documents that address your asset protection strategy sent to a different address from your primary residence. These and other elements will be explained and recommended to you accordingly by a professional fiduciary.
Why An Asset Protection Strategy Must Be Fully Customized
You may have noticed that we do not provide any asset protection strategy examples on our website. Of course we don’t. Firstly, an asset protection strategy is effective only when it is structured to a particular scenario and the needs of each client. Secondly, if we simulate a real-life case, develop an effective asset protection scheme, and make it known to the general public, such an asset protection strategy will no longer be effective in similar real-life situations.
An effective asset protection scheme will correspond to your objectives and needs only when it is innovative and not expected by third parties. There are conventional and straightforward asset protection instruments, such as offshore company formation and implementation for a particular goal, but owing to a large number of information exchange treaties signed by many countries, this type of simple action may not only be insufficient to protect your assets against civil money judgments, but may even be harmful if addressed and discovered by local or international authorities. That, however, does not mean that it is incorrect and ineffective to use offshore companies in asset protection schemes. It is essential to know which company type in which jurisdiction would be the best to use and how to structure it for your particular goals. Another important thing to remember is that, in the majority of cases, a strong asset protection strategy will not include only one offshore company that directly owns all of your assets but will also have certain relations with other offshore bodies, such as companies, foundations, and trusts.
We may often hear pseudo-experts stating that they can offer an effective asset protection strategy in a cost-effective manner. What they usually do is provide the same solution to every client regardless of the client’s current situation, personal needs, objectives, and interests. If it was that simple, a perfect asset protection strategy would be widely known and implemented by everyone. However, this would contradict the main purpose of an asset protection scheme – it should protect your assets and be unknown to everybody else. An effective asset protection strategy is a result of your work with a professional fiduciary who addresses all aspects of your current situation and future plans.
Asset Protection Consulting
Working with a professional fiduciary is crucial for ensuring the creation and realization of a customized and innovative asset protection strategy that defends a client’s assets against civil money judgments.
CS&P creates structures that fully protect your confidentiality in high-standing jurisdictions. The provision of fiduciary services for your funds and assets is another strong side for which many clients choose us. We are in touch with our clients 24/7/365 and always work towards your success. As your asset protection consultant, we
- are in constant communication with you
- ensure efficient communication methods
- analyse your situation thoroughly
- craft the most appropriate solution and plan for protection of your assets
explain why a particular strategy is effective, and adjust it if you have alternative suggestions and wishes
- work with you in the long term throughout the duration of the asset protection strategy
- pay careful attention to your confidentiality
- ensure that you are always able to communicate with your main contact at our company
- constantly adjust the asset protection strategy in place, as a response to rapidly changing international legal and business environments
- provide innovative and effective solutions to any new need that arises in the course of our work
Having a long history of successfully implemented asset protection strategies, we do not reveal our approaches, techniques, and methods to the general public. We develop individual asset protection strategies only for our respected clients, with whom we establish long-term relations based on mutual respect, trust, honesty, and integrity.