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Considerations when choosing an Asset Protection Jurisdiction

We live in a time of ultimate uncertainty.

Business and health uncertainties as economies are taking strain due to the pandemic fuel by political uncertainty across the globe. Daily we adapt to this new way of living forging a new reality for the years to come, without knowing which changes are permanent and which are only temporary and how long this temporary will be. 

Uncertain times like these that there creates increased importance to focus on the protection of assets 

Due to all these uncertainties, it is essential to ensure certainty when choosing a jurisdiction on which to build your wealth protection strategy foundation.

When choosing those jurisdictions to be used in any family wealth protection structure, the following considered:

  • Timezones, make sure that the jurisdiction you are looking at is not on the other side of the world unless the business justifies it. It can be gut-wrenching to wait for an office to open at 17:00 your time to talk to someone.

  • Fraudulent Transfer or other asset protection provisions: Does legislation limit future creditor form attacking assets, 

  • The location of the planner, beneficiaries, and the assets themselves – remember asset protection rule no 1 - separation of assets from oneself.

  • The rule of law, it is vital to choose a jurisdiction with a proven record of its strength, longevity, and certainty, backed by a robust regulatory regime. 

  • Recognition of foreign laws or judgments – Effective asset protection can be undermined if a creditor can obtain a judgment in another jurisdiction that is automatically enforced where the structure is located.

  • Reservations of powers – it is important not to undermine this protection by granting significant powers to a settlor or protector who remains under that court’s jurisdiction of the home country.

  • Perception – Since the structure has been established for legitimate asset protection reasons, it is important not to undermine this by choosing a jurisdiction known for unsavoury dealings. This might inadvertently imply a motive to hide assets or defraud creditors unjustly.

Ultimately, no jurisdiction can offer complete certainty that a planner’s assets are or will be safe. In the end, the ultimate choice of location comes down to personal preference based on the considerations above.

Contact Uchi Advisory to help you navigate through the vast waters of Jurisdictional choice.

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