Foreign Asset Protection Trust.
Domestic Asset Protection Trust.
Any word put before trust is semantics, branding, jargon, or clarification - but it is NOT a legal term. A trust, is a trust, is a trust. Living trust, family trust, asset protection trust, estate planning trust, deferred sales trust, and so on. All of these are trusts. They all follow trust law. They all have a trust deed. They all have a trustee, a settlor, and a beneficiary(ies).
Asset protection is the most specialized field of law. It is the most complex, particularly foreign asset protection because it involves two sets of national laws at a minimum. Few lawyers are familiar with the field. But proper asset protection according to the Dominion Standard is more than an examination of the law - it is financial advising, tax advising, strategy, and a tremendous amount of creativity with respect to application of law (et.al) to the goals of an ultra-high-net-worth-individual (UHNWI).
Therefore, when anyone says the words “asset protection” before “trust” (or maybe just asset protection in general), they describe the usage of a trust for the purpose of achieving asset protection. Alternatively, they are simply trying to describe the overall strategies employed, trusts and otherwise, to achieve asset protection as an outcome. That's a bit of a mouthful. But this is the nature of this field - it's complex!
Our role with Dominion is to teach all we can on the subject and to ultimately get the job done for you in the correct way. The field, in our view, is littered with cheap alternatives aiming at MNWIs (median net worth individuals) - who outnumber U/HNWIs 100-1. Therefore, all the commentary on the subject is written for MNWIs, and not for you. It's a lot of noise to cut through. A lot of amateur strategies are designed for the ordinary and workable “most of the time” cases.
Most of the time isn't good enough for us.
Both. But Settlor is more commonly used. We use Settlor throughout our legal documents.
A settlor (or settlors, as there can be multiple settlors for a trust), "founds" the trust. They are the client. The individual or individuals who determine that a trust is needed then take advantage of our services. The settlor(s) describe their intent for the trust, such as their financial goals, the beneficiaries they want to benefit from the trust, and so on.
We talk with the settlor many times to ensure their goals are well established and that we are able to carry them out.
In simplest terms, the settlor(s) is the one with the money and the one who is making the money.
The trustee is the person or organization that owns the trust and controls it. They carry out the intent of the settlor(s) and act in the best interests of the beneficiaries. A trustee is a fiduciary with financial and legal responsibility, as well as regulatory obligation, to only do things that are in the best interest of the beneficiaries.
This is semantics. In common language, it's your trust. You have a trust, and can say you have a trust, if one exists where you are listed as a beneficiary. You “have” the trust if you benefit from it or are the original settlor.
In legal language, you don't own it. This reason, and this reason almost alone, is how asset protection works. If you own it, you don't have asset protection. Even if you own it through a string of 50 shell companies. asset protection works because of this standard.
It is the Dominion Standard and it's based upon decades of modern trust law, 800 years of common law, and 2,300 years of trust laws that stretch back to Scipio and Caesar.
A protector is not necessary to form a trust.
However, many argue that the protector adds another layer of protection. The word "protector" seems to suggest this. Just like above, this is semantics. Common language suggests it adds protection. Case law shows a very different story.
If you add a protector - someone who has the authority to replace the trustee - a judge will use that protector to enforce a change of trustee, and thus unravel your trust and take your assets in court. The protector is wholly unnecessary and only adds risk, cost, additional administration, and red tape.
UBO stands for ultimate beneficial owner.
International law, particularly banking, is concerned with the UBO at all times. This means that no matter how many companies and trusts and holding companies and other trusts are in the string of ownership, all a judge or creditor is concerned with is WHO ultimately gets that money in the end? If the trust is at the top of the strategy (it should be), then the beneficiaries are the UBOs.
It's the legal document that forms the trust and describes in exact detail what each party is allowed to do. If you get sued and the trust is included by the prosecutor as a de-facto asset of yours, this deed will be read thoroughly by the prosecuting team. Their mission is to find a single word that is wrong. Cases involving asset protection trusts often come down to single words on these documents.
A revocable trust can be altered by the settlor. An irrevocable trust cannot. Revocable trusts are often called living trusts. They are set up for families with 5-6 figures, maybe 7. They are not asset protection. They are basic estate planning for MNWIs (median net worth individuals).
Irrevocable trusts are for asset protection, among many other things. They are often used for entrepreneurs, inheritors, HNWIs/UHNWIs with 7+ figures (often the absolute minimum) of liquid assets and 8+ figures of total net worth. If you want a revocable trust, we recommend you contact an attorney in your local area. They will be able to help. If you want to secure and advance 8+ figures of wealth, then you want an irrevocable trust. We will be able to help.
A self settled trust is one where the settlor is also listed as a beneficiary (i.e., the settlor is also receiving benefit from the trust). These are the hallmark of asset protection work, as they are the most difficult to draft securely. But they can be highly effective when they are set up properly. The Dominion Standard is a solution to this complexity.
Every client’s case will vary based upon liquid assets, predicted revenues, other investments, and so on. The amount of risk exposure to the client is relevant as well. However, our general rule is to move (and thus, safeguard) roughly 50% of your wealth, particularly cash, in a foreign asset protection trust FAPT.
This will drift to a higher or lower percentage based upon your specific situation and goals. Two examples of each are as follows:
Higher Percentage: You're selling a business and then checking out. If you're about to make a sale of an asset and are looking at 50M, 100M, 500M etc. We would advise that almost every dime be put into the trust. This is also because there are many things we can do with that to minimize tax legality and provide you massive revenues for the rest of your life into perpetuity, and for your heirs. The strategies we employ here are incredible and life affirming.
Lower Percentage: You have many purchases and investments to make in the next 1-3 years. If cash flow is an immediate concern, we would advise a lower percentage of protected wealth during that period of time. These things are often business investments and future growth plans.
Our attitude is that asset protection isn't God - maximizing your wealth is. Asset protection is a tool to be used in the right way, as are many other tools. Like Miyamoto Musashi, we do not engage in favoritism.
We look at the case law in your home country, the trust and trustee law in the jurisdiction in question, the stability of those sets of laws, and then the overall economic and political environment in the jurisdiction in question.
"Best asset protection country" isn't a coherent legal concept. It only makes sense as a Google search. Serious analysis means you're looking at all these factors.
If the laws in your country don't respect, or don't have stable precedent, for the trust laws in another, then we do not recommend that jurisdiction for you. Similarly, we have a philosophy that hard economics beats brand recognition every time. We've yet to see a case where the "brand" or the "feelings" about a certain jurisdiction have carried any weight!
We look for countries that have a deep and committed economy around providing this service. Deep and committed to us means that it makes up a major part of their GDP. This is why many small countries provide excellent legal protections, and more "well branded" countries, like the US and EU member states, are overvalued.
Yes, though this is uncommon. The most typical setup is a single settlor. After that, it's married couples.
Yes. We will enforce this if you are a beneficiary. You being the sole beneficiary is too high of a risk given case law in many countries.
No. That's the short answer. If you can change your trust, that means a judge will also see you can change your trust. Which means if you're getting sued, they will ask you to change the trust and pay. Therefore, "change" means there is no asset protection.
But this depends on what you mean by change. If by change you are meaning consider investment strategy, receive distributions as a beneficiary, update your beneficiaries because you've had a child, etc., then yes, of course. A good trustee wants this type of engagement. It's their job, literally forever, to work in the best interest of the beneficiaries. Engagement is necessary.
Moving money into the bank account (offshore) which is held by the trust and controlled by the trustee. See "What is the process of moving assets into a trust?" for more.
It depends on the asset. First and foremost, every client must go through a KYC (know your client) process to ensure that their wealth and assets were obtained legally. Once this is confirmed, then moving assets to a trust is relatively simple.
Cash is sent by international wire. Property transfers require the updating of property deeds and ensuring that the trust and trustee meet the property reciprocation requirements between nations. For transferring businesses, it's updating shareholders agreements or operating agreements, as well as getting the trust registered with the jurisdiction of business operation for tax reporting purposes.
But these are all matters we will discuss with you, as the specific trust recommendations will be based upon your specific needs. Some trusts can't hold property in some countries, for example.
Yes, and more. Dominion Group owns law firms around the world. We hire committed attorneys who will be in this industry for life. Additionally, we are advisors, finance experts, and tax specialists.
We even have a former Green Beret intelligence officer.
We are uncompromising in depth and range because we see over and over again that asset protection is not just about law, but about strategy.
We also see that ultimately nobody really wants asset protection: they want more money, less tax, more security, less fear. We can help with that.
There is no “typical” in this regard. It cannot be underemphasized how critical this element is to get right, both from tailoring the trust to your actual (and evolving) needs, and from a legal perspective. There are simply too many tools available to maximize your distributions, minimize your taxes, and maintain the standards of asset protection.
This is another semantic issue, where the words suggest "update the trust" but the meaning is "correspond with your trustee and advisory team." There is no clear standard here.
We have clients who are opening up new companies every other month and who need their trust and trustee responsive to these investments (from a cash flow perspective) and legal matters (in terms of registrations and proper ownership). We have clients who have executed a careful plan and have used our services to execute a long-term vision, where the trust pays distributions and other forms of tax efficient income, to them and their family for life.
There is no standard need. There is a standard result: victory and freedom.
Yes. But it won't be the same as how you access money in a personal bank account. For asset protection to work, it means that the day to day functions of the trust and all its assets (like a bank account) are run properly. This is where we come in.
Semantics. If you're a beneficiary, you would be correct to say in common language: "I have a trust." But from a legal perspective you do not "own” the trust like a common asset, and this is obligatory for asset protection to work.
We are your trustee, including the law firms we own and the lawyers in them. Were a rogue lawyer to conduct any fraudulent activity, they would be breaking every law to which they are obliged.
Such an individual, as a licensed attorney, in a nation that derives a huge portion of its revenue from legal services like this, will be found immediately. Their passport is registered with their government, as is their address, family records, bank accounts, everything.
It would be the fastest failure of a scheme since that one board member tried to blackmail Batman.
To a certain extent, it is only for individuals, but context is important. A sufficiently complex asset protection strategy and international corporate architecture can substantially decrease the viability of anyone suing the business. But the protection of wealth is a task fit for the ultimate beneficial owner - you, a person.
When a company is sued, the owners pay the bills. Therefore, the protection is meant for the owners. "Protection" for a company is in the form of a local lawyer who defends you in court. It is ideally preventative or fights on your behalf. Asset protection is for when that plan fails, the wealth of the owner is still protected.
As an analogy, proper asset protection is about having a wall that prevents the city from being flooded when the hurricane comes. It doesn't prevent the possibility of hurricanes occurring.
No. That's the short answer.
The long answer is that it's a spectrum. Some assets are easier than others - cash, for example. Equity is another, as are investments, insurance, annuities, PPLIs, DSTs, and so on. If it’s on paper or is a paper, then it's pretty easy to protect.
If you can't hold it in your hand, though, things become more difficult. Boats aren't too difficult, but they can be seized. Commercial property can be protected but requires more layers under the trust. The jurisdiction of the trustee and/or trust comes into play here as well. Personal property, especially the house you live in, is defendable, but requires several steps to properly secure.
We use encrypted communications. If you don't know how to do any of this, we set it up for you. We assign internal code names to each client so common conversation doesn't result in naming anyone directly. We operate only in trust jurisdictions that have the highest privacy and confidentiality laws. We never sell or forward our clients to any external party except without an explicit request from the client.
Yes. This is a bulletproof strategy for asset protection, in fact. We can even establish foundations in your family name or for causes you support and place you and your family on the board of those foundations. There are other strategies here, as well, that combine impact, investment, returns, and tax efficiency.
"... on the death of the settlor (or the last surviving settlor if there be more than one), the trustee shall distribute the trust fund or any part thereof to such one or more beneficiaries, on such terms and conditions, either outright or in trust, as the settlor may appoint by a will or codicil admitted to probate (or its equivalent) by a court of competent jurisdiction."
The trustee will distribute the assets to the beneficiaries. If there is a will, the trustee will distribute the trust according to the will.
There are two levels of trustee failure. One is criminality, which we discuss in "How do I know my money won't be stolen from a trust?"
The other is a failure of service, and it includes everything from timeliness of communication, accuracy of information shared, quality of performance in discretionary decisions, and ultimately failing to meet your needs and expectations. This last part is likely what you mean.
If we fail to meet your needs and expectations, we will react with more speed and force than any professional firm you've ever worked with. If we are unable to reconcile, we will make introductions to other qualified trustees. If you wish to provide your own trustee due to irreconcilable differences, we will process the paperwork and step aside.
Our business is based upon reputation and ability alone, and we will never let a client down, even if that means stepping aside in the most professional manner.
You will receive all trust registration documents, which are not exhaustive, given their confidential nature. You will receive tax reporting as required by your accountant and tax status requirements. You will receive the details of all assets, like cash and investments, that are held by the trust in various banks and investment firms.
Trusts are regulated by the countries in which they operate. Not all countries have trusts. Every country with trusts has one or more regulatory bodies that oversee its functions, laws, lawyers, accountants, business owners, and so on. We only work in countries where the regulatory bodies are well established and endogenously motivated to ensure that their trust industry remains strong and focused on protecting its beneficiaries - you.
In response to the massive data breaches that have affected clients from competing firms over the last 10 years, Dominion has employed best-in-class security measures to keep your private information safe. Through the use of end-to-end encrypted communication via the Signal messaging platform, PGP encrypted emails, and a custom-built SOC 2 Type 2 CRM that follows stringent banking guidelines, client information is treated with the same level of protection as client assets.
A domestic trust is one that is in your country of citizenship. A foreign trust is one that is not in your country of citizenship. A secondary definition would alter "country of citizenship" to "country of business activity" or "country of residence." The underlying philosophy is that domestic trusts are any trust where you have a high degree of legal exposure. Foreign trusts are any trusts where you have a low, or non-existent degree, of legal exposure.
No. You can establish some form of trust in your home country without legal help, just like you can establish an LLC without legal help in your home country. For offshore activities this is not achievable. But if you are seriously considering setting up an asset protection plan without an expert then you aren't thinking about this subject seriously.
We read constantly and have a permanent research team. We have a "red team" on permanent staff as well. Their job is to poke holes in our trusts and find case law or precedent that may undermine how we operate.
Yes. This is the single responsibility of our attorneys and the highest purpose of our trusts.
Yes, and substantially better than a prenuptial agreement can. We have a detailed article on this here. But divorce is one of the easier asset protection strategies to prepare for.
Asset protection trusts are a natural part of estate planning. If you have an estate plan, you likely don't have an asset protection trust. If you have an asset protection trust, you have some type of estate plan, or at least are building it. An estate plan organizes assets and takes care of what happens after you die. An asset protection trust takes care of your wealth, and your family’s wealth, for every day while you're alive.
The premise of an asset protection trust is that it removes actual ownership and control of wealth from the settlor. In the event of an attack by a creditor, how can they take your money, if it's not yours?
They will then try to prove that you are using a trust to simply avoid them. This is why it must be set up before such an event, and set up in the right way. This is also why any trust simply doesn't work.
If you have millions at risk, anyone coming for you will be sufficiently motivated, as they have a lot to gain. They won't rest. The only way to win is to have a perfectly established trust with a perfect operational history.
If a beneficiary wants control of the trust in this way (e.g. being the trustee), then it is not asset protection. It’s just an expensive legal vehicle. When the beneficiary has control in this way, and in the event of a suit (the thing you're supposed to be protecting against), the judge will order the trustee to repatriate the assets, or will send them to jail for contempt until they change their mind.
Yes. This happens all the time. Asset protection case law is an overflowing treasure chest of examples. This is why we set up trusts according to the Dominion Standard. Short of this bar, trusts routinely fail when held up to legal scrutiny.
Hire a team that isn't just lawyers. You need legal, advisory, financial, accounting, tax, investment, business, and potentially even insurance advisors.
A trust that is purely a legal mechanism is just an expensive piece of paper. You don't get the benefits of a Lamborghini by driving in the slow lane.
Yes. They will. They will come for everything they think they can get. This is why it's critical to hire the best team to set up and manage the trust so they spend their next five years paying legal fees and losing their hair, while you experience no impact.
It doesn't. If you have a trust with us, it's likely that loans and mortgages aren't something you think about.
Asset protection is most relevant for those with high risk. Anyone with tremendous wealth is at risk due to exposure and the nature of law (people make money by suing rich people, not poor people), and anyone with a high risk profession that is liable for expensive or regular litigation.
An LLC is not an asset protection plan. LLCs are routinely considered an asset of the owner. Any attorney will be able to show a single instance where you "pierced the corporate veil." They simply do not hold up in court.
Insurance is a great tool to add to an asset protection plan, but it is a reactive strategy, rather than proactive. Asset protection is the wall. Insurance is a rebuilding crew to repair the empire you've built after someone destroyed it. We prefer to prevent that from occurring in the first place. We use insurance within asset protection not as an additional layer of protection, but as a revenue generator for you in perpetuity that is tax efficient and even further out of reach of any creditor.
The specifics of the case will have to be taken into consideration. But in general, no. We would employ other strategies to safeguard your wealth. We won't discuss these publicly.
Yes. They will. They will come for everything they think they can get. This is why it's critical to hire the best team to setup and manage the trust so they spend their next five years paying legal fees and losing their hair, while you experience no impact.
Yes. Setting up your trust prior to divorce is very defensible.
Fraudulent conveyance is when you send your assets to a trust under a 3rd party trustee (like Dominion) during or after litigation. Essentially, moving assets during or after such an event is seen as an illegitimate way to use a trust in the eyes of most every court in the world. This doesn't have to be trust-specific though.
ANY "unloading" of assets from yourself to anyone or anything else during or after a suit is basically you trying to pull a fast one on the law. The law doesn't respect this. You will be held in contempt.
You can. But only if you are not seeking any asset protection. A family member as trustee means the "control" of your assets is held in your family. Courts routinely rule this to be effective control being held by the settlor (you), and therefore they will order you to repatriate your assets or go to jail for contempt until you change your mind.
Putting a family member in place "just to be safe" and then switching to a true 3rd party trustee after you face litigation risks the same consequences. It's not safe to have family as the trustee. Your feelings on the matter have no bearing on what the law is or how proper asset protection strategies work.
Yes. All trusts are separate legal entities.
Yes. This is entirely the point. This works when the trust is set up according to the Dominion Standard.
Yes. The trust can be listed as the entity which holds the property.
Yes. The trust can be listed as the entity which holds the shares/equity/membership.
Sometimes, yes. But the most common variable here is the jurisdiction. All trusts are effectively the same. The relevant detail is the laws in the jurisdiction, the language in the trust deed, and the operation of the trust by the trustee.
Yes, easily. It will just be a matter of analyzing what the asset is, and whether the jurisdiction of the trust and the jurisdiction of the asset are advantageous. In a case where it is not, we look to establish another trust structure that is able to advantageously hold the asset. This is most common with respect to property or tax considerations.
Yes. This is a new area of trust law and banking law. We work in jurisdictions that support this and with banks that offer such services.
Yes. Most clients continuously add assets, particularly cash and profit from their companies.
Yes. We will tell you literally everything. You will have all the knowledge to go hire a cheaper firm after talking to us. But most don't do that, because finding a discount on asset protection isn't a coherent strategy.
No is the short answer. If this is your goal with asset protection, you have your priorities backwards.
However, once you enter the world of high finance and high law and have access to the resources we provide, we will find tax opportunities for you. We always do. The majority of the fees we charge are derived from finding you opportunities for cost reduction or investment growth that others can't. We are highly incentivized to solve these issues, post-trust setup.
Money that goes into the trust has already been taxed (e.g., profit from a business). Then, it depends on the tax law in the jurisdiction of the trust.
We only set up trusts where our clients incur zero additional tax liability. However, there are many situations where we can mitigate or eliminate tax payments through legal and financial mechanisms and use the trust structure, in addition to complex planning, to alter the taxes on the money that goes into the trust. Many of our clients pay nothing. But this is beyond asset protection planning and trust establishment.
It depends on which government. But in many cases, yes. Back taxes and penalties imply that the trust was set up after these were applied. A trust set up afterwards is a textbook case of fraudulent conveyance. In such a scenario, the government will not "access" it; they will hold you in contempt and send you to jail until the situation is resolved. Not all governments have the same reach, however. And different clients have a different threat spectrum depending on their citizenship or the dollar amount that is owed.
The one case where a government can access funds is if the "private" bank assigned to the trust has other branches or partners in your jurisdiction or a friendly jurisdiction to your home country. This is why bank decisions are of vital importance. Too many people believe they have asset protection because they have a generic Swiss bank and a generic trust deed. This is rarely the case. Inexpensive solutions to this most critical of decisions result in a lifetime of suffering.
No. But improper management of a trust could. This is why it's critical to hire the best team to set up and manage the trust.
Anyone who needs our services already has complicated taxes. An offshore trust and any other offshore entities, like a bank or company, will simply require an additional document added to your taxes. Any accountant will be able to handle this quickly and easily.
Yes. Establishing a trust solely for the benefit of your children is one of the simpler actions to take for an asset protection firm.
A revocable/living trust, yes. An irrevocable trust, no. However, a good trustee will listen to the reasons for dissolution from the settlor and the beneficiaries. They will then carry out the appropriate work to get this accomplished if it is in fact in the best interests of the beneficiaries. Our methods will ensure this is done the right way.