Lessons Learned Aobut Offshore Asset Protection
Estimated Time to Read: 3 minutes
Offshore asset protection, when done correctly, is the best way to protect your wealth from frivolous lawsuits, identity theft, and other potentially devastating attacks. However, not nearly enough people practice this proven technique, leaving them vulnerable.
By placing your wealth in a series of trusts, corporations, and other legal entities, and moving it offshore, you can ensure that you and your heirs will have security and privacy where finances are concerned. However, many people have misconceptions about offshore asset protection that this article should help to clear up.
Lesson #1: You are wealthy enough to need it
It’s common for people in the upper middle class to believe that, while they have a lot of money, they don’t have nearly enough to require offshore asset protection. They believe that offshore asset protection is only for the handful of billionaires at the top of our economy. Unfortunately, this belief is the cause of many people becoming vulnerable to frivolous lawsuits and identity theft.
The reason that lawsuits and thefts tend to target the upper middle class is that the upper middle class does not tend to protect its assets as much. The billionaire who definitely uses offshore asset protect is not as vulnerable, and so people looking to cheat their way to wealth know not to target them. Instead, they target people like you, who haven’t yet realized the importance of offshore asset protection. If you take nothing else from this article, take away the knowledge that you need to look into offshore asset protection!
Lesson #2: Offshore asset protection is legal
Many people have the false impression that hiding your wealth in foreign corporations and trusts is shady and criminal. While it’s true that some people break the law in the process of protecting their assets, those people are generally knowingly trying to cheat on their taxes.
As long as you have a trusted financial adviser who ensures that you follow the law, you can in fact practice offshore asset protection in a perfectly legal manner. The privacy and security that fully legal offshore asset protection offers is incomparable. After all, you wouldn’t feel very secure if you were worried about criminal prosecution!
Lesson #3: The IRS is watching
While some people believe that offshore asset protection is illegal, others willingly turn to the less legitimate practices in order to avoid paying taxes. Don’t be tricked by the old notion that the IRS is unlikely to catch you if you violate U.S. tax law when protecting your assets.
This misconception is a vestige of an era before twenty-first century information technology, when people did in fact succeed at evading the eye of the IRS when protecting their assets offshore. However, the IRS has better technology now and a proven record of finding and catching delinquent taxpayers. Make sure to follow the law and you will avoid criminal prosecution.
Lesson #4: Privacy Does Matter
You might have the misconception that no one cares how much wealth you have, and that there is no good reason to hide it. However, keeping your assets private offers tremendous benefits, such as protecting you from the envious eyes of those who would seek to take your money from you.
Assets placed in corporations and trusts will not be tied to your social security number, making the risk of identity that much lower. Furthermore, if it is difficult for people to figure out how much wealth you actually have, they are less likely to target you.
Finally, once your assets reach a certain point, you will prefer to enjoy the privacy of not having the world paying attention to your and your family’s wealth. Offshore asset protection offers this privacy.
Lesson #5: It Can Happen To You
As with all risks, there is a dangerous tendency for people to assume that bad things won’t happen to them. You might tell yourself that no one will bother to tie your assets up in frivolous lawsuits, or that you are careful with your personal information and therefore won’t be the victim of identity theft. These things can and do happen.
Don’t let yourself ignore the importance of offshore asset protection (https://en.wikipedia.org/wiki/Asset-protection_trust#Offshore_jurisdictions). It can save your wealth from more calamities than you would ever expect.