If you're looking into wealth protection, you've probably considered setting up a local asset protection trust. Florida citizens, for example, might consider setting up a domestic Florida asset protection trust. Such instruments are theoretically excellent means to protect your wealth and safeguard it against creditors, legal claims, and so on.
Unfortunately, Florida asset protection trusts have a number of big downsides that make them terrible choices for real asset protection. Let us break down why.
Can You Make an Asset Protection Trust in Florida?
Yes, you can. Though this wasn’t previously the case, the state of Florida now allows residents in Florida and throughout the rest of the US to set up domestic asset protection trusts or DAPTs. Several other states, such as Nevada, also allow you to set up domestic asset protection trusts.
However, just because you can set up an asset protection trust in Florida doesn’t mean you should. You should also not make the mistake of thinking that if you are a Florida resident or business owner, you are limited to setting up one of these vehicles in your home state.
If you’ve worked hard and have significant wealth, you can set up an asset protection trust anywhere you want with the help of experts at Dominion.
Florida Legal Precedent Regarding DAPTs
Put bluntly, Florida is not a trust-friendly state. Court precedent and previous case outcomes have clearly shown that, when push comes to shove, Florida courts will side with lawsuit plaintiffs, creditors, and other legal opponents and will breach the so-called defenses of your domestic asset protection trust.
More specifically, Florida courts and statutes state that:
- If your trust and assets are situated in Florida, the assets within the trust could be used if a creditor bills, court case damages, and much more
- Even if your trust is situated in a state other than Florida, that state’s trust laws and case precedents might not apply. And even if they do, overall US court precedent for asset protection trusts are not favorable for high net worth individuals trying to preserve their wealth
Bottom line: if you have an asset protection trust in Florida, don’t count on it to safeguard your money. Courts will be able to kick down the proverbial doors of your legal fortress, seize the gold within, and leave without any difficulty at all.
Pros of a Florida Asset Protection Trust
But to be honest, there are no real positives or benefits to a Florida asset protection trust. Technically, it’s a little cheaper to set up a Florida asset protection trust as opposed to a trust in some offshore jurisdiction.
However, you have the money for premium protection; why wouldn’t you spend that money and make sure the rest of your wealth is safe and secure?
We say “technically” Florida asset protection trusts are cheaper because, in the long run, you’ll likely encounter a legal battle that your domestic asset protection trust will not be able to shield you from. In this way, your asset protection trust will actually cost you in the long run. You’ll lose money that you could have saved if you had spent the time and money for premium protection in an offshore jurisdiction.
Cons of a Florida Asset Protection Trust
Since there are no real benefits to a Florida asset protection trust, it’s no surprise that there are plenty of potential downsides you’ll encounter. For example:
- With a Florida asset protection trust, you’ll enjoy practically no defense from legal threats, ranging from lawsuits, creditor claims, alimony payments and demands, etc. Remember, Florida asset protection trusts are not defensible because courts will quickly breach their protections and take the money you’ve worked so hard to earn
- Florida asset protection trusts aren't very secret, either. This means that it will be trivial for a creditor or lawsuit plaintiff to discover that you have stashed assets in a trust, then go after the trust instead of your primary bank account
- A Florida asset protection trust is also subject to US laws regarding taxes, fees, etc. When compared to trusts in other jurisdictions, this is an unnecessary financial downside and a limitation you don’t need to deal with
With all these big disadvantages, there’s no real reason to set up a Florida asset protection trust if true wealth protection is your goal. You already have plenty of money, so it’s a good idea to look elsewhere to set up a truly durable, resilient legal shield against possible threats.
Where Should You Set Up an Asset Protection Trust Instead?
In practically every case, the best place to set up an asset protection trust is in a country other than your own. Such a trust will be called offshore because it is set up in a jurisdiction other than the US.
Don’t be fooled by the word “offshore.” It’s totally legal to set up an offshore asset protection trust, particularly when you do so properly with the assistance of knowledgeable advisors and specialists in this arena.
When you work with Dominion, your asset protection trust will be so legally resilient that no lawyer will be able to even think about accusing you of illicit activity, no matter how much they want the wealth you’ve stored within.
True, an offshore asset protection trust costs a little more money than a domestic asset protection trust. But that cost is more than worthwhile when all is said and done. If you’re a successful business owner, for example, you already know the value of quality over affordability.
It’s better to pay a good price for something once, for example, than it is to pay a very cheap price for something that won’t work when you need it to.
Why Are Offshore Trusts So Much Better Than Florida APTs?
Offshore trusts are superior to Florida APTs for a few big reasons.
- For starters, offshore trusts can be positioned in countries with different case precedents and histories relating to the United States and US courts. Put in simpler terms, an offshore trust, provided it’s in the right jurisdiction, may not have any legal reason to comply with a US court demand or creditor claim whatsoever
- Offshore trusts can also be placed in jurisdictions with better tax laws, fee policies, and so on. It’s no stretch to say that your offshore trust might cost less to maintain in aggregate compared to a similar instrument based in the US, though this can vary depending on the exact jurisdiction
- Your offshore trust will be harder to find and analyze by your legal opponents. They might want to go after your money, but if your asset protection strategy is sound, they may not know where to look or how much money you have
- Offshore trusts can further be used for wealth preservation and estate planning purposes. Even though they aren’t based in the US, you can still use them for things like distributing wealth and assets to beneficiaries on a fixed schedule, preventing certain beneficiaries from dipping into their benefits pools too early, and so on.
In fact, you can use an offshore trust for just about any need you have in mind, including many of the common goals of US-based trusts (such as taxes, estate planning, and more)
It’s for these reasons and more that offshore asset protection trusts form the cornerstone of every asset defense strategy we promote at Dominion. We are the experts in this field, and it’s our opinion that offshore trusts are far superior compared to their domestic counterparts.
Even better, you don’t have to set up an offshore trust by yourself. In fact, we recommend that you don’t! By working with us, you’ll save yourself a lot of time and headaches, plus be able to rest assured that your trust vehicle is set up with perfect legal language and excellent documentation.
The result? An ironclad trust that might as well be made of titanium instead of paper. With such a trust under your name – or rather, with you listed as a beneficiary of such a trustee – your creditors and legal opponents won’t be able to touch your assets.
Other Alternatives to Florida Asset Protection Trusts
Beyond offshore trusts, other domestic options exist for those seeking asset protection within the US. Nevada Asset Protection Trusts (NAPT) offer stronger protections than Florida due to Nevada’s favorable trust laws and case precedents.
However, they still fall under US jurisdiction and may not be immune to federal court orders. Series LLCs, available in certain states, allow for the segregation of assets into separate series, potentially limiting liability exposure.
However, the legal recognition and effectiveness of Series LLCs for asset protection can vary across jurisdictions. It’s crucial to consult with legal professionals to determine the most suitable alternative for your specific needs and circumstances.
Contact Dominion Today
To recap, you should never set up a Florida asset protection trust under any circumstances, at least if you want to truly protect it against creditors, lawsuits, messy divorces, and other possible financial threats.
At the end of the day, a Florida trust is nowhere near legally resilient enough for your needs, nor can you rely on it to preserve your estate and wealth for future generations.
Instead, you'll be better off working with Dominion to set up an offshore asset protection trust. Once it's properly set up, your offshore asset protection trust will safeguard your wealth, generate new income, and ensure that your estate is solvent and valuable for decades to come.
We are the experts in this arena, and other high-net-worth individuals have already trusted us with their estates – you can do the same and get started protecting your hard-earned wealth by contacting us today.
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