Cutting-Edge Wealth Protection

Somewhere far out in the South Pacific lies a network of near-perfect castaway islands.

Fifteen in all, their beaches are of white-powdered sands, the waters aquamarine and turquoise, and the climate ideal.

From the shores of palm-fringed lagoons rise soaring volcanic peaks clad in lush green jungle. The locals speak English, and though this paradise is hard to get to, 100,000 people make the trip every year.

But the weather, the laidback lifestyle, and the picture-perfect land and seascapes are not the biggest attraction…

Because these islands have a legacy, and I’m not talking about pirates and buried treasure. (Although what I’m about to reveal is an excellent way of protecting your wealth.)

These islands are an independent country joined in “free association” with New Zealand. It has its own government and court system, the New Zealand dollar is the local currency, and it definitely qualifies as what used to be called a “tax haven,” now replaced by the politically correct term “offshore financial center.”

In the 1980s, certain American asset-protection attorneys played a very active role in advising the government on asset-protection issues, actually drafting statutes for the island’s parliament. This legacy may be one of the reasons the trust law embodies all the best legal concepts concerning modern trusts. As such, it has served as the example for many other offshore financial centers.

Their government officially guarantees no taxes will be imposed on offshore legal entities based there and none ever have. Usually offshore transactions are in U.S. dollars, although other currencies are available.

When explaining why “offshore” is the best place for maximum asset protection, I often hear complaints about long distances and time differences.

But it’s that very distance, and the stronger privacy and asset protection afforded by offshore laws, which gives important extra dimensions of safety for your cash and assets.

And the place you choose to conduct your business is probably the most important basic decision you must make when going offshore.

The trust legislation of these islands is considered cutting edge and has been copied by many offshore financial centers. The asset-protection trust law has now been implemented in one form or another in 13 countries and eight U.S. states. Other laws provide for modern international business corporations (IBCs), limited liability companies (LLCs), and partnerships.

There is strict official supervision of operation of offshore banks, insurance companies, maritime shipping and trusts. And there is a trained international professional community to support these services. With a British common law tradition and English as the primary language, these islands also have an active offshore-banking sector attractive to both Asians and North Americans. Several major Pacific-area banks have offices there.

All that, plus a very strict financial-privacy law that protects you, your assets and your business—a law that even the U.S. government and the IRS have been unable to crack.

Strong financial and banking secrecy provisions apply here, requiring government officials, as well as trustee company and bank employees, to observe strict secrecy backed by criminal sanctions.

In a major American legal challenge to the trust law in these islands, the U.S. government tried to force the repatriation of funds under one of these trusts and lost, even though the Americans who created the trust for a time were jailed for contempt of court. Not even a U.S. federal court could crack the island’s trust laws.

This might be just the place for your asset-protection trust. Some cautious people don’t like to put too much distance between themselves and their assets—and these islands definitely are far away. But as I said, distance between your assets and those trying to grab them are exactly what you need.

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