Offshore asset protection, and specifically offshore bank accounts, are often topics of law journals and financial press. On Saturday, June 30, 2013, the Wall Street Journal published an article about offshore bank accounts. The Journal discussed wealthy investors trying to protect their estate from lawsuits by “stashing money” in offshore accounts in “exotic locales.”
The Journal article points out that offshore accounts do not make sense for most people because of extensive IRS reporting requirement and because offshore banking is relatively expensive and difficult to set up.
. My clients tell me that it is difficult, even impossible, for a U.S. citizen to open an offshore financial account without the help of a foreign company or person who serves as the trustee or manager of an offshore legal entity. Also, offshore planning raises a presumption of fraudulent transfer planning.
I agree with the authors statement that there domestic alternatives that are effective and more cost efficient. There are some domestic banks that are very difficult to garnish, and there are domestic asset protection trusts that provide asset protection benefits with much less costs and much greater debtor control.