For many, this conjures images of the stereotypical Colombian drug lord laundering money in some offshore bank account in the Caymans. For others, it may bring forth images of former Enron executives with their money stashed away in Bermuda. And while this may be true for some, there are many legitimate entrepreneurs and investors at all levels who take advantage of legally protecting their assets from the very real threats that exist today.

Asset protection, simply put, involves legally protecting your assets from the threats that prevail in today’s society. There are two main threats to your wealth; litigation and government interference.

In 2008, there were nearly 1.2 million lawsuits filed in the US. If you consider there are approximately 300 million people, half of them in the workforce, this leaves about 1.2 million lawsuits for every 150 million people. But from 150 million people, less than 20% of them are really at risk to lose something in a lawsuit. That leaves 30 million people at risk. In this simplified example, 1 in every 25 at risk people were sued in 2008. 1 in 25. Not very good odds…

Are you a real estate investor? You can count on that number going much, much higher. You just never know when your next tenant opens a meth lab in the basement and blows the house up and kills someone. Are your remaining assets at risk in this case? Are you willing to risk your entire future on an event of which you have no control?

Asset protection involves anything from simple domestic LLC, up to a complex strategy involving offshore trusts and IBC’s. The strategy varies widely and is very specific to each situation. This is where proper counsel is crucial. You don’t want to find yourself on the wrong side of the law with the government. But a properly developed asset protection strategy will protect your wealth for future generations and give you that much needed ’sleep at night’ insurance.

I will discuss government interference at another date as that is too deep of a topic for one reading. Until next time, live well.

Our job is to provide you with relevant information and news as it relates to your assets.  We strive to seek out the information and relay it back to you in such a way, so you can make decisions on how to manage your wealth and your asset protection plan.  Many of you are likely individual investors and as  of last July, it seems David has won a small battle against Goliath.

You may have noticed in the past few months when you receive your shareholder ballots that if you don’t reply, your broker will send you several reminders asking for your vote.  I know I have noticed it.  And in years past, you received one notice requesting your vote and if you didn’t reply, that was the last you heard of it.

In July 2009, the NYSE Rule 452 was amended to disallow the automatic broker vote.  What  this means is that if you don’t vote, your broker cannot vote for you.  Pre-July 2009, if you didn’t vote, your broker could cast a vote on your behalf.  And 9 times out of 10, the broker would just vote yes to the board recommendations unless there was a major movement to oust executives.

Historically, only about 30% of the shareholder ballots are returned with a vote.  Which leaves 70% with no vote, and before last year, the broker likely just voted in favor of the board recommendations.  Now, without your vote, the broker cannot vote on your behalf, which makes your vote much more important.  This is great news for the small investor.  We actually have won a small battle against the Wall Street behemoths.

For my subscribers last week, I wrote details on one way to properly structure an offshore trust to maximize asset protection.  Trusts are one of the oldest (if not the oldest) forms of legal ownership for property dating back to the Roman times.  While they are a bit abstract and difficult to understand, they are perfectly legal and one of the best ways to completely insulate yourself and your assets against the many threats to your wealth.

I have many clients inquire about trusts, but the number one question is “what happens if the trustee runs off with my money?”  This is a legitimate question, however the way our trusts are structured using LLC’s or IBC’s, it is impossible for the trustee to make decisions about your assets without your consent.  Let me illustrate a simple example;

Your stock trading account is owned by an LLC.  You are the manager of the LLC giving you full control of the use and allocation of these funds.  However, the trust is the legal owner of the LLC, thus eliminating your ownership of the funds held by the LLC.  The trustee is unable to make decsions without the settlor’s approval and you are the settlor.  In this scenario, you are the LLC manager and the settlor of the trust, but not the owner.  The trustee maintains title to the property until your demise, which at that point, your beneficiaries become the legal owners of the property.

As John D. Rockefeller said “own nothing and control everything”.  This is the ultimate goal and can easily be accomplished using an offshore trust.  By using an offshore trust, it keeps the trust assets outside the reach of US courts.  Unless there is a major crime or terrorism at play, countries like Belize and Cook Islands won’t recognize a US court ruling and thereby fully protecting your assets held within the trust.

Offshore trusts aren’t for everyone.  You must report ownership of any offshore trust to the IRS or risk severe legal penalties.  This reporting is not difficult, but it does create additional administration and for some, it isn’t worth the effort.  But if your assets have significant value and you want the ultimate in asset protection, offshore trusts are the ultimate tool.

All US citizens must report any offshore assets cumulatively valued at more than $10,000 to the Federal government.  With two exceptions; real estate and precious metals.  If you are interested in offshore asset protection, these are your only two asset classes that do not require disclosure.  My job is to inform you about these types of situations and introduce you to potential ideas and future business partners.  Today I want to introduce you to Hugo.

Hugo is an interesting guy.  He holds a BS in Computer Science, a JD in General Law, an LLM in International Taxation, a Doctorate in Taxation, a Doctorate in Naturopathy, former CFP, and has traveled to over 100 countries.  Needless to say, he is experienced in international business. 

Recently I heard from Hugo.  Hugo is developing a Wellness Resort and Spa in Costa Rica near the Pan American Highway.  It is surrounded by huge national park and a wildlife refuge.  It is a very interesting concept with medical facilities, spa, hotel, bed and breakfast, and several restaurants.  And right now, Hugo is selling ten of these beautiful lakefront houses for $40,000.

To put the icing on the cake, Hugo has arranged easy, low cost financing for those able to put 30% down.  There will also be property management available for those interested in using this as an income property.  For the entrepreneurs, Hugo is looking for partners for the medical ventures and additional restaurants.  For anyone interested in an absolute bargain in a beautiful location, this deserves serious consideration. 

If you are interested, please send me an email and I will connect you directly with Hugo.  Live well.

I will not overburden you with too much explanation here, but suffice to say, the article in the link below is one of the best articles I have read about Obama’s agenda.  I aligns with my belief that we are witnessing a historic change in American politics and potentially a world shift in power.  The US cannot maintain its leadership role if you remove the incentives for productivity.

Anyone truly interested in asset protection and diversifying your wealth should seriously take precautions and educate themselves on what is going on around them.  Whether you agree with this article or not, you should seriously consider the possibility that the author is correct in his assessment.  Our role in assisting clients with asset protection strategies involves the avoidance of risks that may befall you.  One of those risks is government interference.

Obama and ‘Redistributive Change’