Burbank Land Trust Attorney
Asset Protection Attorney
“Failing to plan is planning to FAIL.” - Ben Franklin
Cost Effective Offshore
Asset Protection Trusts
(The Bridge Trust T)
Many people worry about lawsuits and losing their hard earned assets, but cannot afford the expense of an immediate offshore trust with foreign trustees. LA Law Center, PC is pleased to offer our clients a tried and true Hybrid Asset Protection Trust that has the ability to convert a domestic trust into a foreign (offshore asset protection) trust in the event of possible judgment. lawsuit.
LA Law Center, PC's Founding & Managing Partner, Joseph McHugh is an affiliated California attorney with Lodmell & Lodmell, PC (L&L) that offers many asset protection plans including The Bridge Trust T (TBT) to California. Lodmell & Lodmell provides asset protection services to over 3,500 clients nationwide with an excellent track record of protecting their client's assets. Please click on this link to watch a webinar presented by Joseph McHugh and Doug Lodmell which gives more information regarding this type of asset protection.
The basics of this type of asset protection trust allows the beneficiaries access to assets in the Trust for their benefit unless an "Event of Duress" occurs. this means any action or activity that threatens the Trust assets. a lawsuit.
When a lawsuit happens, a secondary set of rules in the trust are activated so that legally the creditor and the courts are blocked from any access to the Trust assets. During this time, the clients remain the beneficiaries and may still indirectly access Trust assets. (for example: the Offshore Trustee may lease a car for the beneficiary, rent a home or pay credit card bills of the beneficiaries. The net effect is that the Trust assets are permanently preserved for the Trust beneficiaries and completely protected from unauthorized court proceedings and creditors. This is known as The Bridge Trust T (TBT).
The Bridge Trust T (TBT)
Unlike the Asset Management Limited Partnership, which is the most popular impediment to legal attacks for clients with limited net worth, the Bridge Trust T has fast-become the ultimate lawsuit deterrent for clients with assets in excess of $250,000.
Relatively new to mainstream law, TBT was created less than a dozen years ago to help establish "a more level playing field" for largely unprotected defendants who find themselves in the crosshairs of an unbridled explosion of abusive litigation in America.
TBT is tailored primarily for high-risk professionals, such as physicians, dentists, chiropractors, and others with deep pockets and substantial vulnerable assets. The primary purposes of TBT is to protect and conserve a client's financial resources for their future use, benefit, and enjoyment of the beneficiaries, including the grantor. This is accomplished by diminishing the size of the client's "legal" estate through the use of a carefully crafted tax-neutral Bridge Trust T.
Properly prepared by an experienced attorney as part of a comprehensive Estate Planning and Preservation Strategy, TBT can be a powerful legal tool to:
• Remove the incentive to sue from would-be claimants who use the court system for the practice of legal extortion;
• Substantially enhance the grantor's negotiating position with creditors, allowing resolution of legitimate disputes that is far less damaging to the defendant;
• Protect privacy and avoid probate of all Trust assets.
Until triggered by an Event of Duress, TBT acts as a U.S. grantor trust for income tax purposes and by the laws of Nevada. For all other purposes, TBT is governed by the laws of Belize, and, if triggered, by the laws of the Cook Islands.
Asset Management Limited Partnership
In conjunction with the TBT, the Client will form an Arizona Asset Management Limited Partnership (AMLP). TBT will be the large Limited Partner. Typically, the client is a 1% General Partner who manages the AMLP, and a spouse or children become a 1% Limited Partner, with TBT a 98% Limited Partner. This is another layer of protection. Arizona is chosen because once set up, the Limited Partnership does not have to annually renew its existence, and Arizona Statutes make it very difficult for a Creditor to attack or pierce.
The AMLP would be the vehicle that would directly own assets that are 'safe' (i.e., Stocks, Bonds, Notes Receivable, Collectibles, etc.), as well as the equity of LLCs or other limited liability entities that may hold more riskier assets.
Foreign Trust Administers 'Triggered' Trust
If triggered by a threatened lawsuit, TBT, serving as the majority limited partner of the AMLP, typically pulls the client's assets out of the U.S. jurisdiction by legally transferring them to a foreign jurisdiction under the administration of a foreign Successor Trustee. This occurs without the loss of beneficial ownership or distributive rights by the grantor. Importantly, client assets - most of which are in an AMLP - never have to leave the U.S. unless the trust is "triggered" by some crisis. Once the threat ends, TBT can be re-domesticated to the status of a U.S. grantor trust if the client so desires.
When it comes to asset protection, advance planning is a must. Only assets in the Trust will avoid probate and be protected from future fiscal emergencies. Importantly, funding may occur only when the client has no claims pending, threatened, or expected. Once funding is complete, the client must be able to pay all reasonable anticipated debt from resources outside the Trust. Accordingly, the client must sign and notarize an Affidavit of Accuracy and Solvency before the Trust can be established.
Unlike the AMLP, TBT may own sub-chapter S stock and annuities. The trust may also own personal residences without loss of tax-free capital gain or home interest deduction benefits. Unlike the Revocable Living Trust, TBT, when holding title to a personal residence, can legally remove the equity of those residences to the protection of a foreign jurisdiction, if needed. While IRAs and other qualified retirement plans may not be placed in the trust, TBT may be a primary or contingent beneficiary of such plans.
Successor Trustee Can Make Distributions
Once triggered, the grantor may request distributions of resources to selected beneficiaries and make bequests through Letters of Wishes to the foreign Successor Trustee. The trustee, with consent of the trust's "protector", has the power to make distributions in any amounts desired in accordance with the terms of the trust. This includes distributions of resources for the maintenance, support, health, education, and general welfare of any and all beneficiaries.
The Protector is named by the grantor. In the case of our clients, the protector typically is L&L. In addition to having veto power over the foreign Successor Trustee's actions, the Protector also has power to remove and replace trustees for any reason or no reason and to determine when an event of duress has occurred.
There are no income tax advantages of asset protection planning other than those that can be accomplished through conventional planning - nor are there any disadvantages. A legitimate Bridge Trust T is tax neutral. Its objective is to protect assets - not evade taxes.
Of the hundreds of Bridge Trusts T prepared by L&L's attorney-analysts, less than a handful have been challenged over the years and none have been penetrated. A properly drafted Asset Protection Trust (APT) is virtually impenetrable, while combined with a proper integration with a Family Limited Partnership (FLP) and Limited Liability Company (LLC) the APT is a fortified asset protection structure.
Best Advice-Seek Experienced Legal Counsel!
Joseph McHugh, LA Law's Asset Protection Attorney has the knowledge to make this as easy as possible and ready to help you understand your options and then begin this process. Our asset protection lawyers prepare custom asset strategies that address you and your family's particular circumstances and long term goals.
We are proud to be a part of the complete solution to your estate and privacy issues, not just the lawyers that create the legal documents. We understand the issues surrounding your asset protection concerns and what it takes legally to meet your needs and goals, while giving you the peace of mind that your estate is at a greater level of privacy from public research.
Please contact our office for a free initial consultation with Joseph McHugh, a California Asset Protection / Estate Planning Attorney Call us at: (818) 241-4238
Our Law Office is located in Southern California; however, we serve many clients throughout the state and love an occasional road trip to help all of our clients, their family and friends. We can also create all documents and mail them to you for final notarization of documents.
We also are happy to serve out of state clients with family or assets in California.
We are very proud of the many personal and professional referrals we receive from happy clients and colleagues. Please contact our office today to schedule a free consultation.
Take advantage of a phone consultation or appointment for a free 30 minute consultation to review your individual situation and determine if you would benefit from our experience and legal services.
Call us at: (818) 241-4238
Click Here for Joe McHugh and Doug Lodmell Webinar