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

• Author: Jeffrey Robert Matsen
• Profession: Founder and managing partner of Matsen Voorhees Mintz LLP
• Pages: 57-64

57

CHAPTER

10

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