A foreign trust allows you to protect your liquid assets very well. It is not governed by the same laws and regulations as a trust within the United States. A foreign trust is an irrevocable trust and assets therein are protected for a debtor by the laws of the nation in which they are kept. Essentially, this means that a nation in which you have a foreign trust will not recognize any legal judgment from any country, including the United States regarding the assets held within the trust.

As California asset protection goes, a foreign trust is a phenomenal choice for those looking to keep their liquid assets protected in the event of lawsuits (such as malpractice or being sued). A foreign trust can be more powerful than a simple offshore account because it can harbor liquid assets like a regular bank account, but it can also safeguard intellectual property and other types of assets that an offshore account cannot.

A foreign trust is managed by a trustee — this keeps it from being in the name of the person who earned or owns the assets therein. What makes this type of trust so powerful is that even though it is in the name of a trustee, the trustee cannot do anything with or to the assets without the express consent of the individual to whom the assets belong. In addition, the rightful owner of the assets can control or determine what happens to the assets without having his name on the trust or anywhere else that would indicate his possession of the liquid assets or other property within the trust.

Those with large estates and professionals who are at greater risk of being sued due to the nature of their occupation are encouraged to look at foreign trusts as a part of their California estate plan. If you’d like to protect your assets and have considered offshore accounts, consult with a Newport Beachestate attorney to determine if a foreign trust is a good fit for your estate.