Episode 1167: Asset Protection Tips Every Entrepreneur Needs to Know with Blake Harris
What is an offshore asset protection trust and how it works
Offshore asset protection trusts let you transfer assets—cash, stocks, crypto, real estate—into a foreign trust while retaining beneficial use. The trustee controls distributions, enabling you to access funds for living expenses or investments while shielding the principal from creditors, lawsuits, and divorce claims. Think of it like gifting a boat to a trusted neighbor who still lets you use it, but whose ownership protects the boat from legal seizure.
Why mid-net-worth business owners need protection
Contrary to common belief, asset protection is not only for billionaires. Blake Harris explains that most plaintiffs sue people with less than $2 million in assets, and many of his clients fall in the $1–$10 million range. For entrepreneurs, doctors, influencers, and attorneys, an offshore trust provides negotiation leverage and settlement control when legal threats arise.
Timing matters: set up before litigation
The single most important factor in effective asset shielding is timing. Establish and fund an offshore trust well before any claim arises. Blake notes that protection is robust almost immediately after proper setup, increasing further after one or two years—provided there’s no pending litigation at the time of funding.
Offshore versus domestic asset protection
Domestic trusts in states like Nevada, Alaska, and Delaware have value, but U.S. courts can sometimes compromise them through full faith and credit or result-driven rulings. Offshore jurisdictions such as the Cook Islands, Nevis, and Belize routinely provide stronger legal barriers, making foreign trusts harder for U.S. courts to break.
Taxes, reporting, and ethics
An offshore trust is tax-neutral: it won’t increase or decrease taxes if reporting obligations are followed. Transparent compliance and proper IRS disclosure reduce audit risk, while focusing the trust’s purpose on litigation protection and estate planning rather than tax evasion.
Choosing a specialist and real-world outcomes
Because offshore trust law is specialized and rarely taught in law school, choose experienced practitioners. Blake Harris shares case examples where trusts turned a potential multimillion-dollar exposure into a small negotiated settlement. Look for firms that combine reputable jurisdictions, strong trustee relationships, and deep industry experience.
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For more practical guidance and a primer on offshore asset protection, Blake Harris recommends his book "Don't Let a Lawsuit Take Away Everything" and visiting BlakeHarrisLaw.com for consultation and resources.
