The Nevis limited liability company is an effective and efficient offshore asset protection tool. In May, 2015, the Nevis Assembly enacted an important revisions of the Nevis LLC Ordinance. The new law significantly improved asset protection benefits of forming a Nevis LLC. The new law is called the “Nevis Limited Liability Company (Amendment) Ordinance, 2015,”.
An important rationale for offshore asset protection is effecting the removal of the debtor’s asset beyond the jurisdiction of U.S. courts. For example, people choose to form LLCs outside the U.S. because they believe a U.S. court would not have jurisdiction over the debtor’s membership interest in order to impose a charging lien. That theory was rejected in a recent …
Debtors set up LLCs in foreign countries to protect against creditor charging liens against their membership interest and distributions. During legal research this past week I came across a Connecticut case where the creditor found a way to effectively attach a debtor’s distributions from LLCs formed outside the U.S.
Proponents of offshore trust suggest that a U.S. creditor could not obtain jurisdiction over the offshore trust or its trustees. Many of my own clients believe that because a U.S. court has not jurisdiction over the offshore trust the court has no way to either discover trust assets or to obtain a judgment against the offshore trust compelling the repatriation …
Most offshore asset protection plans, and similarly complicated domestic plans, do not hold up if a motivated creditor pursues its attacks through a vigorous legal challenge including appellate review. Most appellate courts will not sustain the promised protection of offshore planning.
The New York Times published an article this past weekend regarding Cook Islands asset protection trusts. The article suggested that these offshore trust provide excellent protection for even the most egregious debtors.
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.”
It is difficult for creditors to garnish an offshore bank account because U.S state courts do not have jurisdiction to issue a writ of garnishment against a foreign bank with no U.S. branches. Keeping cash out of creditors’ reach would not be difficult if all one had to do was open a foreign bank account while making required IRS disclosures.
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.
People who are considering offshore asset protection understandably prefer a plan that is simple and that maintains control over their assets.