so one of the most common misconceptions about offshore trust is that you can use them to avoid or evade paying income taxes that could be done legally you could avoid income taxes I would I would have flown over my private jet here but um but no you cannot use an offshore trust to avoid income taxes what you can the way a trust is structured is it's tax neutral it does not increase your taxes it does not decrease your taxes there are certain IRS reported requirements you must complete if you have an offshore trust or an offshore bank account and in doing so we provide our clients a detailed tax memorandum which they could share with their CPA to show them how to complete the optional reporting requirements or we have a network of CPAs we work with that we can refer a clients to to complete those reported requirements it does not increase your chance of an audit the way the IRS calculates whether they're going to Auto someone reporting if you have an offshore trust is not going to increase your chance of an audit because that's an active compliance hello and welcome to the Swiss money Secrets podcast presented to you by whvp whpp is a company that has been helping Americans move assets outside of the US for over 30 years in this podcast the listeners can expect to hear on subjects pertaining to Offshore investment and investing outside of the U.S markets in the U.S dollar now let's get into it all right so uh welcome back to the Swiss money Secrets podcast to all of our listeners uh we are really excited today to have with us Blake Harris of Harris law and um yeah we're gonna be talking today about asset protection and specifically offshore trusts and cook Island trusts um we're really excited to have you here Blake and hear from your expertise um you know all the way coming from America you got off the plane this morning and directly here which is incredible commitment to what you do which is really cool um before we jump into that we want to quickly discuss a vote so a national referendum that's coming up here in Switzerland in about two weeks yes and uh so Jamie maybe you could explain our last episode actually talked about another referendum that's going to come up in the news section but maybe you can explain this one we like to vote um we have actually spoken about this last year so it's about the oecd minimum tax um Switzerland is one of 138 countries that has agreed to issue a 50 minimum tax on larger corporations so it's only gonna affect a small fraction of companies here it's with some you're only effective if you have an uh Revenue over 750 million a year but if you do have that you have to pay a minimum tax of 15 which is um quite a bit higher than what a lot of the low tax states or accountants here in Switzerland typically charge so our vote will be on what to do with the money um we cannot vote on better or not to accept this minimum tax this has already been decided last year I think we did a separate episode on that but now there's Swiss population gets to vote on how we're going to utilize the the excess Revenue that is going to be generated So currently the proposal is that the access tax will be sent back to the captains so that the lower tax contents can use the extra money um to keep their um Place favorable because they lose a little bit of an advantage because they cannot have the low taxes anymore to attract companies 75 as I said we'll go back to the accountants and then 25 will go back to the state so that's what we're going to vote on my personal assumption is that probably it's going to be accepted because if we would decline this the money would just go to the European Union or some other foreign jurisdiction which is not going to be very beneficial to our so yeah which I think is in a nutshell yeah I think it's a really interesting uh vote because I would have thought it's pretty straightforward this was people yeah yeah 75 to the smaller Canton let's you know spread this around a little bit but there's actually some opposition to it that people want all of the money going straight to the federal government which I thought was quite interesting that that's a position that they're taking um yeah I mean the candles that have the lower tax are typically the Richer accountants so they say it's going to be fair if it goes to the national government I mean those are yeah small discussions from I would say minority of people but um we'll see I mean as as usual the population has the last say here so we'll see on June 14th um how this is going to work out but I assume it will be extended Blake do you have any thoughts for the outside looking in when you hear about that kind of maybe anything that pops up into your head well there's a lot of opportunities here anytime there's some new taxes coming in so I think it's a good time to be looking at your overall financial plan and asset protection plan and maybe looking into diversifying how you hold some of your money because uh Switzerland and other countries are finding new ways to fund the government as they're running out of money and so I think that leads right into maybe more what we're going to be talking about yeah so let's then jump into that right away so today we're going to be talking about Cogan's trust and offshore trust in general asset protection and kind of what that looks like today Jim you could start us off with um getting getting us rolling on this episode sure yeah I mean before we dive into the topic Maybe maybe telling us very like speaking what does asset protection mean and why is it so important and relevant especially for Americans um very good so asset protection is the process of structuring your assets so that if you are ever sued you have the ability to either avoid paying that judgment or negotiate a better settlement offer why is it important for Americans well America is by many standards the world's most litigious Society it's very easy to bring the lawsuit of the United States you can bring on a Contin have to pay anything to bring a lawsuit there's generally a system where you don't have to pay if you lose your case you don't have to you can even file a case without a very good Merit nowadays it used to be much harsher punishment prior to about 1983 for bringing in bogus claim the courts are very much softened up on that and now we're seeing a lot of claims that don't have Merit being brought in and it's so expensive to defend the case in the United States that many times a Defender will just end up paying a settlement offer as opposed to trying to find it all the way to the end because it's just so expensive to litigate in the United States and what's essentially happening is a lot of people are becoming the victim of legal extortion so in the United States a lawsuit is very much considered a badge of success if you're successful enough you're going to get sued which is why it's very important for a lot of people to put together an asset protection plan so what are the options when you speak about ask protection programs are there different levels of protections are there different options oh absolutely absolutely talk to 10 different asset protection attorneys you're probably going to be presented with a hundred different options I would say though it pretty much boils down to two different strategies for protecting your assets there are the domestic asset protection Trust And Then There are the offshore asset protection trust the benefits of the domestic trust were one as an attorney they're much easier to convince a potential client to sign up for a domestic asset protection trust they're more comfortable with the jurisdiction if they've heard of like Alaskan Nevada Wyoming for example however the downside domestic trust is they do not offer the same level of protection and earlier in my career I did set up a few domestic trust but I saw how much weaker the selling Leverage What the settlement leverage was with a domestic Trust so now my firm we do exclusively offshore trust and I do this for my own money because I'm not going to be gambling with my money and I do it for my clients because I'm absolutely not going to be gambling with my clients money so in terms of options you got the domestic Trust easier to set up easier to get people on board with them that don't get the same level of protection that you get with an offshore trust within all short trust there's a few different jurisdictions where you can set up an offshore trust and I think we'll get more into that in a moment yeah so that's I guess that's where I would like to ask or hear your expertise on when it comes to there's a bunch of different jurisdictions uh maybe not a bunch but a few jurisdictions where that those offshore trusts can be held in specific weave we hear a lot about Cook Islands trusts and I guess you were mentioning about a lot of frivolous lawsuits so what is what does a I guess a Cook Islands trust in specific what do they actually offer when it comes to dealings for those lawsuits and and how do they actually protect the client against I guess those kind of lawsuits so I was just talking about the United States system and how easy it is to bring a lawsuit the laws in the Cook Islands are very different in order to bring a lawsuit into Cook Islands number one you cannot hire an attorney at a contingency fee so that's right there is going to knock out more than half ball cases in the United States most all are brought on a contingency fee you tell a plan if they actually have to put some money up front and it's not a cheap amount of money that you have to put up front to bring your case that's going to deter a lot of litigation on top of that you have to win your case in the Cook Islands Beyond A Reasonable Doubt in the United States you want a case you need what's called a preponderance of the evidence which means 51 to 49 if you can convince a jury just slightly more likely than not that you're correct you in your civil case in the United States for a criminal matter you have to have what's called Beyond Reasonable Doubt where it's basically a 99.9 certainty that this fact is correct if you're the argument you're alleging is is accurate that's the standard that they hold due to in the Cook Islands where you have to prove a civil case Beyond a reasonable debt very hard standard of proof on top of that they have the oldest and long-standing asset protection trust law and that seems back to the mid-1980s for about 40 years now they have been known as the premier jurisdiction for asset protection getting to your other question that you kind of let in with which was various different jurisdictions there's more than a dozen different jurisdictions with asset protection trust laws in place however the best three are the Cook Islands Nevis and Belize uh Belize is very well known for their zero look back period and in certain cases a police trustee is the right solution however in terms of trustee selection you get more and in my opinion better options for trustees if you look to either Nevis or Belize Nevis copied the laws of the Cook Islands trust law so it's very similar in legislation they even added a codified bond requirement of a hundred thousand dollars but to bring the case to cook Island you still have to post a bond in the judge's discretion but it's going to be similar to the amount and Nevis the reason I like the Cook Islands over Nevis is because of the mindset that the government has towards the asset protection business Nevis they make a lot of money by selling passports down there they don't take their asset protection business as seriously and they've threatened to introduce legislation which would water down their asset protection trust law I wrote a government a letter to the government recently encouraged them not to water down their ass protection trust law but this is not the first time they've floated the idea of we can either ask a protection legislation the Cook Islands on the other hand they've never once sold a passport I don't think they ever will sell a passport the asset protection business is vital to their economy they're taken very seriously and so that is why I continue to store most of all my clients to the cookout it's probably 99 to the Cook to the Cook Islands very real circumstances will come up where clients have very close ties to another Caribbean nation and want to use their their laws or we recently had a client who was out of New Zealand and New Zealand because it's proximity to the Cook Islands we decided Nevis trust was better and the other occasional rare exceptions but in almost all cases we would go with the Cook Islands as the first choice of jurisdictions for our clients asset protection trust yeah that's really that's really really interesting to hear I mean I some of I mean Jamie knows this and clients might know this as well but I lived in the Cook Islands for for three years and um I think your point about the protection of what's being held in the Cook Islands is so strong I mean I remember even new zealanders was a New Zealand passport can't come and just live in the Cook Islands you have to be of cook on origin and that kind of I can see that line of really protecting what's being held in the cooks for the cooks itself and that's that's a really interesting point to see that even further in their law and uh and I say the same thing about Swiss banking it's a difference between just having the right laws and having the right mindset and the Cook Islands they have the right mindset other countries have good banking laws as well but Switzerland has the history of the mindset for being a banking jurisdiction so yes it's interesting to hear you lived in the Cook Islands I don't come across too many people outside of the Cook Islands spent uh that have lived in the cook Island yeah I think part of that is it's difficult it's difficult to be there you have to have the right connections I mean not only in the government but also going there on the right reasons and so yeah that's that's certainly interesting so maybe I guess I would be curious to know what are I mean you talk through some of the advantages of the coke Islands in comparison to Nevis and not but are there any I guess disadvantages that might come into play when it comes to the Cook Islands or is it really just something that is so clear-cut I mean as you mentioned you refer most of your clients there is there anything that clients should be concerned about in an example of the kind of assets that they can hold in their Cook Islands trust okay so one thing to keep in mind when within offshore trust is the location of the trustee does not have to be the same location as the assets sometimes it is there is a banking relationship we have in the Cook Islands that sometimes we will utilize that bank but for the majority of my clients we are diversifying where their assets are so the trust deed is going to be registered in the Cook Islands but they'll open up an account in another jurisdiction most commonly here in Switzerland okay and what about like hard assets so if someone has property or um maybe a company can they also have that held in the Cook Islands trust so pretty much any asset you can own can be protected whether it's through its own protection that already comes with such a certain insurance and annuity policies or other assets that don't come with any level of protection there's some way to get them protected cash is the easiest you open up the offshore bank account cryptocurrency you can assign to your trust and then in some case continue to have self-custody of it if there's no pending litigation if there is then it's better to utilize a third-party Vault to hold that cryptocurrency or one of the banks that will accept cryptocurrency in terms of real estate now real estate is a little bit trickier because you can't just pick up the piece of real estate and move it outside of the jurisdiction where it's threatened but you can move into your trust and this way the court can't order you to hand it over they'd have to just go through a foreclosure process or probably skip going to the Cook Islands and forcing them to do any anything another option is to sell it a litigation arises or just simply sell it and take those liquid proceeds or you can get a mortgage on the property or get a lien up against the property and then place that lien inside of your trust proceeds from that lead inside of your trust in terms of running a business there's certain liability that is inherent with the business you can't divorce the business from so you still have to have your operating business in the United States let's say um the way that you protect that business is you number one you could form a holding company to hold any hard assets and then have operating business lease those assets from the holding company have that hold a company backed by your trust maybe uh even mortgage those assets hard assets out so you can get everything everything liquid otherwise any excess cash you have in the business dump that into your into your offshore offshore trust and those are the main assets that clients come to me to protect cash stocks bonds cryptocurrency real estate and then how to protect a business that's interesting so if someone has heard all that and is interested in moving forward what what are the specific steps to set something up and maybe also in terms of like I don't know kyc you know your customer documentations what we have here so it's on I assume you have something similar um what kind of documentation is needed to set everything up how long does the process take so in order to get the trust established we typically say it's about 30 days this assumes the clients are prompted communicating with us and that they have a relatively clean background the Trust Company may want to dig in more if there's one or more lawsuits or if the client has some type of criminal history um in terms of what information is needed we're going to need to verify the source of their wealth so we're going to have to ask some questions about how they got the money that they're looking to put into their trust mainly we want to make sure that we're not looking with anyone involved in money laundering terrorist activity drug dealing but as long as money was legally gained generally we're able to help keep that protected fascinating yeah that's that's really interesting to see and I guess the other question that I have that might come into I guess client's head is what are the tax implications of an offshore trust or how does how does the US I mean obviously the U.S taxes on a globalized wealth um or the global wealth of of each of their citizens but what does that look like when an offshore trust is involved so one of the most common misconceptions about offshore trust is that you can use them to avoid or evade paying income taxes uh that could be done legally you could avoid income taxes I would I would have flown over my private jet here but um but no you cannot use an offshore trust to avoid income taxes what you can the way a trust is structured is it's tax neutral it does not increase your taxes it does not decrease your taxes there are certain IRS reporting requirements you must complete if you have an offshore trust or an offshore bank account and in doing so we provide our clients a detailed tax memorandum which they could share with their CPA to show them how to complete the official reporting requirements or we have a network of CPAs we work with that we can refer our clients to to complete those reported requirements it does not increase your chances on audit the way the IRS calculates whether they're going to audit someone reporting that you have an offshore trust is not going to increase your chance of an audit because that's an active compliance yeah I mean often what I see I mean as an American when it comes to the IRS as long as you're reporting everything and you're doing your really your best and you're not purposely leaving things out that's what I've always talked about with lawyers or CPAs like look as long as you're doing the steps that you know you should be doing you're seeking help the chance of an audit is not going to go up certainly um but it's it's always a consideration that Americans think about or are curious to know um I guess another question I have there is what in terms of privacy and when it comes to not just asset protection but the privacy of a client is there any kind of level of privacy added with an offshore trust for clients wealth or structures or wealth structures so privacy is a very confused topic I mean the short answer to your question is yes with an offshore trust you get as much privacy as you can setting up any type of estate planning type of trust all trust structure however you can always be ordered by a court to report what your assets are so clients perspective clients call me sometime and say oh I'm going to put everything into a Wyoming LLC and I no longer have to worry about anybody trying to uh know what money I have it's an anonymous LLC that they've been told and the reality is if someone has a judgment against you the court can call you and and ask you to complete the financial affidavit or a debtors exam and in doing so you have to report all of your assets including your cryptocurrency including money held in offshore offshore trust failure to report then do in jail so you what you'd report everything that you have however simply reporting something does not Grant anybody access to it so you would say that you are the beneficiary of the XYZ trust but when the court asks you to get money out of it that's when you're going to be prevented from when the court orders you take money out of it that's what you can be preventing from getting it and that's when the money stays protected you will of course the client will always comply with any court court order um but uh that's the way the trust works okay yeah so how it really sets them up for in the sense of whenever the government comes you have to report you have to Iraq you have to report you're not going to hide assets um but in terms of is in a publicly registered deed no it's they register the name of the D but they don't list who the beneficiaries are publicly the U.S courts are not going to be able to get information out of the Cook Islands without going to the cookouts court system which is extremely rare um so it does give a certain level of privacy but it's not a tool for hiding assets yeah of course and that's I think that's something we we are never in the game of hiding things away from authorities I mean I I know you certainly aren't we definitely aren't so I think that's really good to make that clarification of what we're talking about um Jamie do you have any other questions you might have no I think uh my friend out of questions yeah I've covered all the important things are there any final thoughts and anything we should have covered anything that should have asked so this was this was this this was fun um just to uh kind of maybe mention what we're talking about beforehand uh Jamie I just want to commend you for uh your social media efforts um and being willing to stand by what you say on camera uh it used to it used to be attorneys were very afraid of going on camera um they were kind of laughed at for going on camera but now if an attorney can't go on camera and speak about what they do and stand behind it I really think that shows a weakness so I think uh you're going to uh continue to be a leader in your field so uh thanks thank you so much I appreciate it it's been awesome having you and um we're excited to keep following you also on your social media handles maybe you could tell our clients um where they can find you if they want to learn more about you know what you're doing on camera or where they can follow you easy enough Blake hair slaw it's my Instagram is my Tick Tock it's my website Blake harrislog.com perfect and I'll make sure I put that on the show notes um and if any of our listeners ever want to contact us let us know and we'll be more than happy to put you on to Blake thanks again for joining us on this episode of The Swiss money Secrets podcast if you would like to learn more about whvp and what we do check us out on our website at whvp.ch or you can check us out on any of our social media handles on LinkedIn Facebook YouTube or Instagram by simply searching whbp have a great rest of your day