Step Six on the Ladder: The Offshore Asset Protection Trust and the Modular Planning that Accompanies It

AuthorJeffrey Robert Matsen
ProfessionFounder and managing partner of Matsen Voorhees Mintz LLP
Step Six on the Ladder
The Offshore Asset Protection Trust and the Modular
Planning that Accompanies It
For well over a 100 years, US citizens and many foreigners have utilized Offshore Trusts for Asset
Protection Planning purposes. Often, when individuals hear mention of offshore structures, they think of
a scheming design to evade taxation reporting. Legitimate offshore planning, however, has nothing to do
with tax evasion. Tax evasion is a felony in the United States and is not and should not be the objective
of any good citizen/reasonable person. The consequences of a felony conviction—including jail time—
should deter anyone from considering tax evasion. Offshore tax dodges have given offshore planning a
bad name, but there is nothing wrong with setting up an offshore structure for Asset Protection Planning
purposes. Such structures are usually tax neutral, but do require substantial reporting and compliance
with IRS forms and regulations. Filing these documents, however, is not a huge burden if one has the
proper CPA and legal advisors.
Basically, there are three factors that should be present when going offshore for Asset Protection
Planning purposes. First, the individual involved should have substantial liquid assets that can be placed
offshore. The goal is to set up a nest egg and protect these assets. The whole reason for going offshore is
to place assets outside of the jurisdiction of the United States; offshore planning requires there be enough
liquid assets to transfer offshore, so as to make the structure worthwhile. A second factor in deciding
whether to go offshore (which is not a determining requirement, but does help to sustain the offshore
structure) is international connections. For example, if the US resident has relatives or family offshore, then
the offshore structure makes more sense. Also, if the US resident owns property offshore or does business

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