Tribal LLCs v Offshore Trusts
Offshore trusts have been the gold standard for asset protection for decades. However, offshore trusts and corporations are very expensive to set up and maintain, and there are cumbersome tax reporting regulations for offshore vehicles, as well as stiff penalties if you fail to report or report incorrectly.
The asset protection and privacy a Tribal LLC provides is equal to and in some respects better than the protection of an offshore trust without the expensive setup fees, maintenance fees, and burdensome tax reporting requirements demanded of offshore protection vehicles.
How Offshore Trusts Protect Assets
The most significant benefit to an offshore trust is the simple fact that a creditor would have to navigate the legal system of a completely different country, which can be both very difficult and very expensive. First, you would have to obtain a judgment against the trust in a U.S. court, then go to a court in the country where the trust is located and ask them to please uphold that same judgment. The problem is that not all countries recognize U.S. judgments or jurisdiction, and even the ones that do will do things according to their own laws and in their own times. Each country will have its own definitions for the burden of proof required, as well as its own statute of limitations. Taken together, it’s all usually enough to put off all but the most diehard of creditors.
However, both the benefits and risks of an offshore trust can vary greatly, depending on the country involved, their laws, and how they accept U.S. laws and judgments. Tax benefits and asset protection can be quite significant for an offshore trust, but you still have to be very careful. Also, before establishing an offshore trust, there are many things you should consider, as some of the very things that make it difficult for creditors could also work against you under the right circumstances. These include the local laws, politics, and economic stability of the country where the trust will be located, locally available legal and financial services there, the availability and reliability of modern telecommunications, and more. Much more.
Why Tribal LLCs Are Better
Both offshore trusts and Tribal LLCs provide excellent asset protection and potentially avoid fraudulent transfers. However, offshore trusts require complicated trusts documents that are expensive to create and maintain, involve complicated IRS reporting requirements, and impose severe penalties for failure to comply with IRS tax requirements. Also, assets in an offshore trust are not immediately available. A Tribal LLC, on the other hand, is simple and relatively inexpensive to create, is inexpensive to maintain, and requires minimal tax reporting. Finally, it’s easy to get to your assets in a Tribal LLC; just write a check.
Let’s Talk More About Meeting Your Asset Protection Needs With a Tribal LLC
Have you decided to set up a Tribal LLC, or at least find out more about them to see if this entity is right for you? Call 239-649-8050 or use the online contact form to book your consultation with attorney Marc Shapiro so we can learn more about your needs and advise and assist you appropriately.
