Why do Offshore Trusts provide better asset protection?

In the United States, generally no asset protection exists for assets that you place in a trust created to benefit yourself and for which you are the trustee. In such cases, the trust’s assets can be seized by your creditors just as if they were owned in your own name.

However, a handful of other nations—such as the Isle of Man, the Cook Islands, and Belize, to name a few—offer Trustmakers greater asset protection. These nations allow you to be the Trustmaker, Trustee, and the Trust Beneficiary and still protect the trust’s assets from creditors.

Furthermore, these countries will not honor a United States Court’s judgment or lien against trust assets in their jurisdiction. Before a creditor can seize trust assets, these nations require that a trial be held on their soil. The creditor must pay the often exorbitant fees associated with litigating a case in a foreign country. The cost of bringing witnesses and other legal evidence to a foreign court can prove prohibitive, as can the legal fees of a local attorney. Legal fees alone can prove a costly and insurmountable burden to bringing a lawsuit, as the trust-favorable nations do not allow for contingency fee lawsuits. Instead, they require that the plaintiff’s attorney be paid without regard to the outcome of the action.
If this were not enough in the way of asset protection, these nations also demand that the plaintiff meet the burden of proof required in United States criminal courts. A creditor plaintiff must prove its case “beyond a reasonable doubt,” not the much more lax “preponderance of evidence” standard used in the United States.

Finally, the countries most favorable to Offshore Trusts greatly limit the amount of time allowed to a plaintiff to bring legal action. In the United States, plaintiffs often have many years to file a lawsuit but in these offshore nations, plaintiffs have only a year or two to bring suit, depending on the circumstances. So for those desiring greater asset protection, Offshore Trusts can provide immeasurable peace of mind.