Using LLCs as Asset Protection Structures

By Georgetown Trust

Offshore_LLC___ISAlthough there are thousands of potential goals and strategies for your financial portfolio, it can all be boiled down to two major priorities: making money and keeping money. There are a variety of investments and opportunities available for those who want to see their wealth increase, and that is in addition to traditional income sources like paid salaries and wages.

Although it might sounds easier, it can actually be more challenging to preserve and protect your hard-earned assets. One of the most effective structures for asset protection is an offshore LLC, which can help you better control and secure your net worth.

What is an LLC?

An LLC, or limited liability company, is generally considered to be a company that is much smaller than a corporation. It may be owned by a single person or through a partnership, but it helps individuals to avoid liability in the case of bankruptcy, legal action or any other complaints and concerns.

Many LLCs are domestic and are created expressly to help individuals better claim business expenses and turn a small operation into a legitimate business. However, as will be detailed below, an LLC can also be an effective way to protect assets, even if you don't have what might typically be thought of as a small business.

What are the Benefits of an Offshore LLC?

By establishing an offshore LLC, you can place your assets into a financial vehicle that separates itself from you as an individual. Should you be taken to court, have your assets frozen or need to declare bankruptcy, your assets within the offshore LLC would remain untouched and inaccessible to others. This kind of safety net is a key way to ensure that whatever happens, you have the financial backing to care for yourself and your loved ones. In addition, an LLC may be taxed at lower rates than an individual's investment income, which could save you money in the long run.

What Assets Can be Included in an LLC?

Virtually any kind of asset can be placed within an LLC. For those who take a hands-on approach to international investments, an LLC could be filled with stocks, bonds and shares from around the world. When investments do well, the company profits. You can pay yourself from the profits, but the investments themselves remain a separate entity free from intervention.

An LLC could also protect an international beach house that is used as a rental property for part of the year, a piece of land that will eventually be sold to developers or a large stockpile of gold bars and other precious metals. If you have an existing IRA, you can also opt to add it to an LLC and self-direct it, taking greater control over the future of your retirement funds.

Why Choose an Offshore LLC?

If you have determined that an LLC is the best way to preserve your assets, go one step further by making it an offshore LLC. By establishing your LLC in an offshore destination like Belize, you can benefit by having lower or even nonexistent taxes, which puts more profit back into your pocket. Plus, you can enjoy that the offshore component diversifies your portfolio and ensures that your financial success isn't tied to one single currency.

Whether you want to limit your financial liability, take control over your IRA or establish a new international business, an LLC can be a great tool for asset protection.

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Topics: Asset Protection