California Asset Protection and Offshore Trust Attorney, Sebastian Gibson
Asset Protection - Advantages of Offshore Trusts and Foreign Trusts
If you’ve been searching for California asset protection lawyers or offshore asset protection attorneys in California and haven’t found the asset protection attorney in which you can be confident when retaining a lawyer for your asset protection, voluntary disclosure, offshore trust protection and family limited partnership matters in California, Sebastian Gibson is the asset protection attorney you’ve been looking for.
California Asset Protection Lawyer
With over thirty years of experience handling international matters, with law degrees in both California and in Great Britain, and years of international experience in London as well as decades of experience in California, California asset protection lawyer Sebastian Gibson brings a wealth of experience to the table and was chosen one of the 2011 Top Lawyers by Palm Springs Life Magazine.
Offshore trusts which are synonymous with foreign trusts provide a layer of asset protection unparalleled in the U.S. Whereas jurisdiction over assets on American shores can be asserted by U.S. courts, the situation is quite different for assets placed in offshore trusts. Although U.S. citizens and residents must still report these foreign trusts to the IRS and both settlors and beneficiaries must report their income to the IRS, their protection cannot be overstated in most cases.
One of the greatest deterrents to a creditor seeking assets held in an offshore trust is the cost of having to go to court in a foreign jurisdiction, with foreign lawyers, within a limited amount of time, and then to pursue collection in that foreign jurisdiction or another jurisdiction if the trust flees to another offshore location.
A creditor who may first think it won’t be difficult to go after a foreign trust will find in the most protective foreign jurisdictions that their U.S. judgment isn’t recognized by the courts in the foreign jurisdiction, that there is a surprisingly short statute of limitations, and that they must prove to the foreign court that the debtor intended to hinder, delay or defraud the creditor beyond a reasonable doubt.
Some foreign jurisdictions do not recognize judgments obtained in United States federal or state courts. In jurisdictions in which this is the case, creditors must retry their claim in the foreign jurisdiction. With the daunting prospect of having to start over and hire local attorneys to retry the claim, who may not even be hired on a contingency basis, the costs of pursuing such an action can deter all but the most determined creditor and prompt a settlement for pennies on the dollar. Some jurisdictions even require the losing party to pay the attorney’s fees of the prevailing party, and when the odds are stacked against a creditor, this alone can be a daunting prospect.
It is in the difficulty and obstacles a creditor encounters in attempting to collect a U.S. judgment against an offshore trust that is the foreign trust’s attractiveness in asset protection schemes.
Some of the tax aspects of foreign trusts are these. Generally, an offshore or foreign trust is deemed a foreign grantor trust under the tax code because of the fact there is a U.S. beneficiary. Contributions to an offshore trust are thus free of income tax. Further, the contributions will reduce a person’s gift tax exemption.
Income from a foreign trust, however, is reportable and taxable to the beneficiary, even if not distributed. Upon the death of the U.S. beneficiary, however, unless the trust still has another surviving U.S. discretionary beneficiary, the appreciation in the trust assets will be taxed as a taxable gain.
So long as the foreign trust is treated as a grantor trust, the foreign trust can be funded with assets without their being a taxable gain on the assets transferred. Additionally, the transferred assets are not considered to have been a gift to the trust, incurring gift tax. However, all income of the trust is taxable to the grantor and there are onerous U.S. tax reporting requirements for the grantor, which if not followed, can result in stiff penalties year after year after year. Not only must the creation of the trust and transfers to it be reported to the IRS, any beneficiary of a foreign trust also has reporting requirements.
While the cost to set up a foreign trust and to maintain it are substantial, their costs should not be weighed against any tax savings to determine their usefulness. A foreign trust’s value is not in any tax savings or any misconceived perceptions that it will afford secrecy. The protection they afford is determined by their usefulness in a comprehensive estate plan which includes protection against the claims of future creditors.
In compliance with IRS requirements, we must advise you that any asset protection or U.S. federal tax advice contained in this informational article concerning offshore trusts is not intended to be used nor is it published in order for it to be used and you may not use it for the purpose of avoiding penalties or fines under the Internal Revenue Code. It is not intended to be used nor is it being published in order to promote, market or recommend foreign trusts or any specific transaction, tax-related matter or estate planning tax scheme to any party.
California Asset Protection Attorney, Sebastian Gibson
Sought out to be a writer for California’s two largest and most prestigious legal newspapers, California asset protection attorney Sebastian Gibson’s articles have been published in the Los Angeles Daily Journal and the San Francisco Daily Journal. Today thousands and thousands of people visit this website and his blogs monthly for useful advice and thousands more follow him on Twitter for his humor.
One of the best asset protection attorneys for people in California to follow for his humor and wit, one of the funniest California asset protection lawyers as well as one of the top humorous California asset protection attorneys people follow on Twitter, California asset protection attorney Sebastian Gibson has been called "brilliant," "hilariously funny" and a "legend."
It matters more than you think who you call for your asset protection and other legal matters. When it matters most, call California asset protection lawyer Sebastian Gibson. When it’s time to hire a California asset protection attorney, hire a legend.
