Passive Income Blog

Thousands of lawsuits are filed daily, many without any merit, filed by people looking for easy money. In our lawsuit-plagued world, proper structuring to separate yourself from your assets, and all of the potential liability that follows, is almost a necessity… or should be anyway!

“If you and your family have assets, including cash, stocks, property, businesses and inheritance, then you are vulnerable to losing everything you own by a single lawsuit or judgment brought against you,” warns Kevin Wessell, CEO of Offshore Company, a leading asset protection and offshore services company in business since 1977.

“Everyone is vulnerable and everything you own can be taken away in a split second by one simple court judgment brought against you. Think of a simple everyday situation that can happen to anyone. You are driving your car, minding your own business when suddenly you are involved in an accident. The other driver decides to file a lawsuit against you. The plaintiff’s attorney not only investigates what your insurance policy covers, but what your assets are worth, including money in the bank, stocks, home, properties and businesses you and your family own. The plaintiff’s attorney now has an idea how much you are worth and how high they can set the lawsuit. In this simple everyday situation, one split second (the accident) could cause the loss of everything you and your family owns,” cautions Mr. Wessell.

Asset protection (sometimes also referred to as debtor-creditor law) refers to a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments, creditors, partnerships and international entities. Asset protection helps minimizes the risk of loss from unexpected hazards of businesses and individuals. This law has shielded and protected many families from business failures and lawsuits. There are also many programs available to help an individual or business minimize or avoid tax liability. Asset protection strategies vary depending on factors such as country of residence and citizenship, age, or annual net income.

Quite simply, you want to own nothing and control everything.

Before the Basics of Asset Protection are outlined, lets be clear about the fact that we live in an overly litigious society where the consequences of words like justice, fair and reasonable do not hold strictly to their definitions. Most people have a moral grasp of right and wrong, but this does not protect us from accidents, business decisions, medical situations and circumstances we cannot control. The most basic of all human needs is security. Asset protection (or structuring) merely gives you security and control over your assets.

Specifically, when referring to assets, we are referring to a person’s home, car, furniture, savings, investments and business. Essentially, assets are anything of value that can be seized by another resulting from a lawsuit, court order or through the action of an alphabet gangster government agency. In reality, everything worth value is worth protecting.

Before going further, be reminded that each individual’s situation is unique. Each principle discussed is applicable when the unique circumstances of each asset meets the criteria. This is why it’s encouraged to study this area on your own.

How Asset Protection Works

There are literally hundreds of different techniques to protect different categories of assets. Some are appropriate for everybody and are based on common sense (e.g. not flashing your money around or never entering into a general partnership) and others are appropriate for wealthy or soon-to-be-wealthy people. Asset protection techniques also vary depending on both the type and location of property & assets.

All asset protection techniques have one thing in common: they each make it more difficult for a creditor to either find or take assets. By implementing a properly crafted asset protection plan (which may include a Private Interest Foundation as well as an Int’l Business Corp) an individual can legitimately put a significant portion of his assets out of the reach of judgement creditors and still retain substantial control over these protected assets.

A properly implemented asset protection strategy reduces the size of the target the plaintiff’s attorney is shooting for. Once the plaintiff’s attorney is convinced that any judgment will be difficult or impossible to collect his motivation fades because he is unlikely to be paid for his work. The effect of asset protection planning is the destruction of the economic incentive to litigate.

Asset Protection Services in Panama

A privacy tax haven jurisdiction is one in which bank secrecy laws and corporate privacy laws are already in place and the jurisdiction does not tax offshore derived income or capital gains and there is no inheritance tax.

Asset Protection Planning and Strategy

Asset Protection strategies generally begin with an offshore bank account in a privacy oriented tax haven jurisdiction. To tighten the privacy up one needs to use an anonymous offshore corporation, an offshore trust, and/or an offshore foundation like the PIF (Panama Private Interest Foundation).  Otherwise, bank wires will have one’s personal name as the sender or receiver, which effectively destroys bank secrecy.

Asset Protection & Bank Secrecy

Setting up the asset protection strategy in a jurisdiction with strong banking secrecy has got to be a cornerstone of the asset protection structure.

Favorable bank secrecy laws generally call for civil penalties and the opportunity for criminal convictions if any bank employee, officer or director divulges any banking information or files, statements etc pertaining to any bank account or the bank account holder.

Strong bank secrecy laws like Panama Bank secrecy Laws also allow the victim whose privacy was violated to file a lawsuit against not only the bank with their deep pockets but also the person(s) responsible for the privacy violation.

With strong measures like this in place, information leaks almost never happen in Panama. Only when ordered by a Panama court will a Panama bank release your information.

This only happens in criminal matters as determined by a Panama court. For example, tax evasion is NOT a crime in Panama and as such your records would not be opened up should someone come snooping.

In the USA and in the EU, most private detectives have little or no trouble getting bank account information for clients. Their methods are highly illegal but we never hear of any of them getting prosecuted as the courts are so curropted there.

Be careful of this if you are considering an onshore asset protection plan.  Learn more about banking secrecy laws in Panama.
 

Stay tuned for Part 2…

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