Asset protection strategies are instrumental in creating a safe haven for assets in the case of a divorce, lawsuits and a host of other dangers. Such protection strategies are particularly useful should the need for a "nest egg" with which to start over arises after a divorce, or lawsuit. A Trust outside your home country and hidden from public view is one of the many ways to protect your assets.
San Jose, Costa Rica (PRWEB) 2006 -- Offshore Asset and Wealth Protection bring a host of benefits.
While asset protection is instrumental in creating a safe haven for assets in the case of a lawsuit or to utilize them as tax benefits, it is crucial that the asset protection plan implemented appear to have a multi-functional purpose. In other words, you need to be able to prove that you have set up an asset protection plan for more than one reason; otherwise, an asset protection plan may be a wasted venture.
Since there is such powerful protection given to the rights of creditors, asset protection must not be seen as an effort to hinder the claims of creditors. As such, not only should an asset protection plan be set up well in advance of any potential claims or lawsuits, there must be readily available proof that the plan has not been set up with the sole purpose of asset protection.
The same scenario exists with regards to the tax benefits of asset protection. If the IRS determines that the only reason for an asset protection plan is to avoid paying taxes, then they may not consider the assets may a tax benefit and you will have a hefty tax bill.
There are a number of major benefits to asset protection that may be considered as legitimate reasons to set up an asset protection plan. The most evident benefits are the protection of your assets in the case of a lawsuit and the obvious tax advantages that accompany asset protection.
Another reason to set up an asset protection plan is to enjoy greater financial privacy. You will have fewer assets in your personal name, which means a lower personal income, which in turn will make you less of a target for the IRS or for credit reporting agencies who build large databases full of financial information on each individual's financial activities.
By protecting your assets, you can also avoid the costly liability insurance that is required to ensure that your assets are safe in the event of a liability lawsuit. This is risk management. By lowering your coverage and monthly premiums, you become less attractive to creditors looking for an easy kill.
Don't put all your eggs in one basket! This old cliché could not be more true in the case of asset protection. One of the reasons for setting up an asset protection plan is to spread your assets out in such a way that, should one set of assets fall into someone else's hands due to legal ramifications, the other pockets of wealth and assets will remain untouched. This is particularly useful should you need a "nest egg" with which to start over after a financially-draining lawsuit. A trust that is outside the US and hidden from public view is one of the many ways to protect your assets.
Seek the help of a specialist when considering asset protection. This way, you will be sure to benefit from the experience of someone who is versed in the legalities of asset protection and can diversify your assets for the maximum benefits a protection plan has to offer.
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Ron Z. Mendelson, director of offshoreXplorer.com, is an expert in offshore asset protection strategies, and specializes in wealth protection, foreign asset protection, international business corporations, worldwide investing, global banking, offshore online gaming, and international e-commerce.