One my clients hired me for offshore asset protection advice after having purchased offshore real estate many years ago. The client had bought a second home in Aruba for all cash. The home was titled in the name of a Panamanian corporation. A Panama bank was named as the sole officer and director. The corporate documents stated that the company held real estate as a “nominee” of the shareholders, but the documents did not name or describe who the shareholders were. The bank assured the client that it would follow the client’s directions regarding renting or selling the property. Rental income from the Aruba house is listed on the client’s U.S. tax return. The client asked me if the house was protected from her U.S. judgment creditors.
The creditor’s execution against this asset would be very difficult, but not impossible. The creditor could not practically execute on the property in Aruba or the corporation in Panama. However, the creditor could try to get a U.S. sheriff to levy upon the debtor’s equitable rights in the company. This type of creditor tool is unusual but not impossible.