The Entrepreneur DNA - Offshore Trusts Explained: How to Legally Protect Your Assets | Blake Harris | EP 41

Starting point is 00:00:00 I do not believe whatsoever this concept that being weak is a good and moral action. Weak men have never led a revolution. Weak men don't protect anyone. Freedom, Justin, does not exist without protection. If your assets are not protected, you are not free. Your family is vulnerable. It is absolutely legal and very ethical to set up an offshore trust. What is up, entrepreneur DNA family? This is going to be a good one. If you want to know more about offshore trusts, whether they're legal and ethical, make sure you watch this entire episode because my guest Blake Harris from Blake Harris Law Firm is here.

Starting point is 00:00:39 What is up brother? Justin, great to be on the show. Thanks for having me here. Yeah. Excited to have you. So tell us a little bit about yourself real quick. Who are you? What do you do? And then let's get into the tough questions. Let's do it. So I'm Blake Harris. I'm the managing attorney at Blake Harris Law. My firm focuses exclusively on using offshore trust and offshore banks to keep our clients' assets protected from lawsuits and divorce. So the first question I got to ask you, when I think of offshore trust, I think of movies, I think of Wolf of Wall Street, I think of scams, I think of hiding money, hiding from the feds, hiding, you know, hiding's where most of the lawsuits are. In reality, offshore trusts have been allowed for centuries, most commonly since the 1980s when the Cook Islands passed their asset protection trust law. Offshore trusts are perfectly legal. It is perfectly legal for a U.S. person to set up a Swiss bank. Yes, Swiss banks will open up an

Starting point is 00:01:40 account for an offshore trust for an American. Not all Swiss banks will work with Americans, but we definitely have relationships with quite a few Swiss banks that are more than happy to open up an offshore account. There's domestic trusts, which are available as well. I don't know why anyone would set those up. They're much easier for a court to break. But in terms of legality, yes, an offshore trust is perfectly legal. Is it ethical? I do not believe whatsoever this concept that being weak is a good and moral action. Weak men have never led a revolution. Weak men don't protect anyone. Freedom, Justin, does not exist without protection. If your assets are not protected, you are not free. Your family's vulnerable. It is absolutely legal and very ethical to set up an offshore trust.

Starting point is 00:02:22 I love that idea of weak men don't lead a revolution. Talk to us about who your ideal client is. Who's usually coming to you? And I can't imagine it's the weak men. So it is people who have an open mind. The majority of Americans, and this goes back to the concept of our offshore trust illegal or our offshore trust unethical. The majority of Americans have never left America. Those who have, majority of them have never gone anywhere other than Canada or Mexico. It takes somebody with a little bit of an open mind. And open-minded people tend to be more successful in business and in life. The majority of our clients are actually not what I would consider super wealthy. There's

Starting point is 00:03:00 a misconception that offshore trusts are only needed by people with hundreds of millions of dollars. The majority of my clients have somewhere between about $1 and $10 million in assets. We do have quite a few clients whose net worth is a little bit under a million. And we did bring on our first billionaire client earlier this year. But the majority of our clients have somewhere between about $1 and $10 million in assets. They're typically engaged in some business. They typically own some real estate. They may own some crypto, often business owners, some single, some married, some concerned about the future of their marriage, often concerned about just the overall riskiness that is involved in running

Starting point is 00:03:36 a business in America. What's great about America is that it is still a land of opportunity. If you work hard, if you're disciplined, if you're creative, if you're decently smart, you can become wealthy here. But this is, by many standards, the world's most litigious society. There are millions of lawsuits filed every single year. There are billions of dollars in order to be paid out in judgments. And getting sued is not a fun process in the United States. Suing someone is an easy process. It doesn't cost you anything. You can bring in a contingency fee. There are attorneys out there advertising, stirring up business which would not otherwise be brought. But being on the receiving end of that, it's expensive, both in terms of time and money. What ends up happening is a lot of people end up paying

Starting point is 00:04:15 a settlement, even though they are being faced with the BS claim, because it's just cheaper to pay somebody off than it is to fight the entire process. What ends up happening is people end up becoming the victim of legal extortion. And I don't let that happen to my clients. I love that. So I've been sued and it was a BS claim and I ended up settling because I could have won, right? And my lawyer said, we will take him to the mat, but you're going to have to pay me to take him to the mat. So I started to weigh the pros and cons of my time, my energy, my focus, and money. Correct. Where we ended up with my settlement and where he would have ended up charging me for the year of winning. Yep. I would have netted out the same, but it cost me a year of my life, distraction, energy suck, focus suck, the whole thing, right? So I get that. In fact,

Starting point is 00:05:02 walking this through in that settlement, it was a real, I'm a big real estate guy. So it was a real estate lawsuit. And I essentially won, but settled because I didn't want to do all the other things I just mentioned. How would have having, because I did not have an offshore trust and I still don't, but now I'm going to be talking to you after this. How would that have played into that lawsuit? How would I have either not had to settle? How could I have gotten away from the whole thing, if you will? So an offshore trust, when you buy an offshore trust, what you're essentially buying is settlement leverage. Now, if somebody brings a legitimate claim against my client, I generally advise clients to make a settlement offer,

Starting point is 00:05:40 make a settlement offer that's reasonable to you. Don't get taken advantage of. Don't have a situation where your back's up against the wall. the court is just there taking advantage of you. Instead, what you should do is make some settlement offer, but the trust gives you that leverage to push back and say, we're giving you a little bit of money to settle this case. And if you don't take this money, everything's backed by an offshore trust and you're not going to be able to get anything. So either take the settlement offer or continue to spin your wheels and get nothing. Now, if my client's faced with a BS claim, that's when I say make no settlement offer. Tell the opposing party that you're not going to pay anything now, and you're not going to pay anything later.

Starting point is 00:06:16 God, I wish I had that then. It's fun. It's almost fun to get sued when you can tell the opposing party that they can pound sand. That's right. You know, and I guess in my scenario, the, is it the plaintiff? The plaintiff, yes. Yeah, the plaintiff thinks they're right. So obviously they think they have a line of sight on some thing, but they didn't, right?

Starting point is 00:06:40 And so I guess you just say, great, come after me as much as you want. I'll just pay my lawyer as much as I need you to just kind of keep it away. But you're going to get no money out of me. Correct. And most lawsuits, not all, but over 90 percent, over 95 percent of lawsuits are brought for one reason. Money, of course, people, if you can eliminate the economic incentive for someone to sue you, you've eliminated any reason for someone to sue you. Sometimes in a family situation, lawsuits are brought for other reasons, but the majority of lawsuits are brought because somebody wants a payday. And if you can tell them they're not going to get paid, they're going to drop the case. Sometimes when we've had a client sued,

Starting point is 00:07:16 we have had the plaintiff find out that there's an offshore trust and they just drop the case entirely. Generally, it helps with settlement leverage. It helps with the negotiation. But in some cases, plaintiff attorneys just will drop the case, move on to an easier target. So there's a couple of questions. And just so I remember them, I want to know what type of assets go into a trust. But before we even get there, well, let's start there because my next one would be a good follow-up to that. So what type of assets would someone, and I'll just use myself as someone now that is very intrigued on this, what type of assets would I want to be putting into the offshore trust?

Starting point is 00:07:54 And then I guess the follow-up to it is how much of the cash income that I'm making relative to keeping it in my bank account or wherever the case, would I be wanting to funnel over to offshore trust? Okay. So I'm going to start by answering the second question, which is how much? I am pretty aggressive in protecting my client's assets. I will tell clients to keep about six months to a year worth of living expenses outside of the trust. This assumes nobody's actively trying to collect against you. Somebody's actively trying to collect against you, then you're going to spend down that account to just about zero, and your trustee will step in to pay your day-to-day living expenses. But up until the

Starting point is 00:08:32 time that there's a judgment against you or somebody's actively trying to collect, it's just logistically easier to keep some money in your personal account and pay your day-to-day living expenses. In terms of what we protect, we're going to protect pretty much anything that is not already protected. So let's start with that analysis. What is already protected? If you live in Florida, as you may know, your home's already protected asset from anything other than a tax debt or a divorce. The same thing is true for Texas. Other states have some homestead protection. In some cases, it's tens of thousands of dollars. In other states, it's hundreds of thousands of dollars. You subtract out any mortgage, and if there's little or no equity left, we don't need to put

Starting point is 00:09:08 the home into the trust. Retirement accounts also come with a level of protection. It varies by state, but generally, the first million dollars in a retirement account, a qualified retirement account, is going to be protected. If there's more than a million dollars, the court may say, you don't actually need this much for retirement. Some of this needs to be used to pay a creditor. And there's other strategies that can be done to further protect a retirement account. Generally though, cash, stocks, bonds, crypto, investment, real estate, or second homes, those are not protected. So we will help clients open an offshore bank account, typically in Switzerland, which is then owned by the Cook Islands Trust. The only way anyone's going to get access to that account is if they get a court order from the Cook Islands.

Starting point is 00:09:50 Switzerland won't release the funds unless the party, which country, which controls that account releases a court order. And it's extremely hard to get a court order to the Cook Islands. And we can go into why that is later. So the assets that go into the Swiss bank account, the Swiss bank and brokerage account, cash, you can hold US dollars, you can hold Swiss francs, you can hold Euro, you can hold a variety of different currencies. You can also transfer your stock and bond portfolio over in kind. So you don't have to realize any gains, you transfer it over. It's all under the safety of a Swiss bank and brokerage account. And the banks

Starting point is 00:10:25 that we work with in Switzerland are generally much better and much safer than US banks. These banks, they don't engage in risky activity like investment banking or prop trading. They don't allow outside investors who pressure management to take risky bets. They keep far more cash on hand. An American bank might keep 5% to 10% of cash on hand. These banks keep anywhere from 25% to 40% of cash on hand. I often get asked, does Switzerland have FDIC? They have a similar program to the FDIC, but far more important than finding a bank that's insured when it fails is finding a bank that's not going to fail in the first place. And if Swiss banks start failing, it's because all the American banks have failed months or years ago.

Starting point is 00:11:09 So not only is your money better protected from lawsuits under the structure, it is also better protected from a failure in the banking system. You can also open up an account that holds crypto. We work with some offshore providers that will allow you to store crypto there. If there's no pending lawsuit, then we may allow the client to be the custodian of the crypto. So you assign your Bitcoin to the trust. The trustee then turns around and hires you to hold the keys. It's under the protective nature of the trust, and you still have the power to keep the keys in your hand. Real estate. Real estate typically will advise that it's first placed in an LLC or C corporation, and then that LLC is owned by the trust. So the member, the owner of that LLC that owns the real estate becomes the trust, and then the manager

Starting point is 00:11:52 can be the client. You can still manage your property yourself. So as a big real estate guy, I have a question to that. If I have a partner or two partners, I'm thinking about some of my assets. One has two other partners in it. Well, a group of assets have two other partners in it. So I have a percentage of it. Correct. I would hold my ownership in the trust. Exactly. Your percentage ownership would be held in the trust. And then if anything ever happened to any three of us, the entity that owns the assets, whatever the case may be, and some lawsuit comes, my percentage of said assets is protected. It is all the assets protected because of my trust. So it is as well protected as possible with your trust.

Starting point is 00:12:31 Your trustee is not going to release the funds to anybody other than you or anyone other than that you directed them to release the funds to. The only time a trustee is really not going to honor a request for a distribution is if you're only making a request because you're under court order. A court has ordered you to release the funds. You comply with the court order. Our clients always comply with court orders. We always tell our clients to comply with court orders, but the trustee is going to refuse a request that you make when you're acting under duress. Now, when a property is owned by multiple parties, a third party generally is not going to be as attracted to taking that property because,

Starting point is 00:13:05 quite frankly, they don't want to own an asset with you and two strangers. They want to own the property all themselves. So it makes it less attractive and, again, goes back to what I said about settlement leverage. Now, you need to be aware with real estate, it's not going to get the same level of protection as an asset that we can put in a bank account offshore or a piece of real estate outside the United States because as long as the asset is still here, there's a possibility the court could directly go after that asset. Now, having the trust is helpful because number one, the court can't order you or the trust you to hand it over. Cook Islands is going to trash any court order they get from anywhere other than the Cook Islands. The other benefit is that on a

Starting point is 00:13:44 financial affidavit, you can report the value of that asset at $0 because you're technically a discretionary beneficiary. And it requires a plaintiff who's coming after that property, coming after that asset, to start a separate foreclosure action, which is a costly and lengthy process, again, giving you more room to negotiate. Now, for better protection, you can sell the property or you can mortgage it, strip out all the equity, put the equity into an offshore account. And all of a sudden, this property that's worth half a million dollars is mortgaged up to about 95% of its value. It's no longer an attractive asset for someone to take. You can release a little bit of funds

Starting point is 00:14:17 to pay off a settlement. No one's going to take a piece of real estate when you can give them cash worth more than whatever they would get after the foreclosure process. I love that. And so keep going. I know I stopped you in the middle, but I was just kind of thinking through the real estate side. This is some big real estate guy. So crypto, you can do crypto. I have crypto. You can do real estate. Yes. I live in Florida, so my own personal house wouldn't necessarily have to be in there, although I could, right? You can put it in there and you still get the homestead benefits with the way we designed the trust, but it's really probably not necessary. Maybe just drop your home into a estate planning or revocable living trust so that it avoids probate after you pass away. But generally a home in Florida and Texas, we won't do it.

Starting point is 00:14:57 If there's exposed equity in California, for example, we get a few hundred thousand dollars of equity protection, but there's still a few hundred thousand dollars of unprotected equity. Then we put the home into the trust. Go ahead, Justin. What else? What are the assets that you'd want to be putting in there? So the main ones are cash, stocks, bonds, real estate, crypto. We can put IP into a trust as well.

Starting point is 00:15:20 And then a business can go into a trust. Typically, if it's an American business that's operating here, we recommend running that business lean and mean, so taking as much equity out of the business as possible and putting that equity, putting that cash that we pull out of the business into an offshore structure. Yeah. In my account, which would be another offshore trust. Exactly. And if you have hard assets in a business, you've got a lot of video equipment, or you have a lot of supplies, we may recommend forming a separate holding company for those hard assets. Have your operating business lease those assets. So if your operating business gets sued, all they have is a lease agreement. They don't have the actual

Starting point is 00:15:59 assets, which can be seized. And then taking those hard assets, putting that into the trust, or even better, equity stripping those hard assets, putting liens on those, and then taking those hard assets, putting that into the trust or even better, equity stripping those hard assets, putting liens on those and then putting the proceeds all into an offshore account. We work with international lenders who can help equity strip property as well. So stocks, and I'll go stocks and crypto because there's some similarities, right? Because there's a brokerage essentially that you buy through. So stocks, so I'm not a big stock guy. I buy kind of blue chips, like I'll buy Tesla and Facebook and Amazon and just let my money sit, right? Sure. So I do it through E-Trade. How does that work with you guys? Does my whole E-Trade account go

Starting point is 00:16:34 into the trust? How does that all work? So we can set it up with a domestic brokerage firm and have an LLC own that account and then have the trust own that. But if we do that, it's the same issue with real estate. The assets are still here in the United States. We encourage clients to open up an offshore account. Now, once clients have an offshore account open, if they still want to keep some money in a domestic account, we don't mind them doing that if there's no pending litigation. As soon as some heat comes their way, we're going to tell them to empty out your domestic account and dump it into your offshore account. So you need to have the offshore account up already.

Starting point is 00:17:07 Exactly. Because the offshore banks become reluctant if you're facing a lawsuit. That's right. In some cases, we can still get an offshore account open if there's pending litigation, but the process is much smoother, quicker. You have more banking options. The fees are lower. If you do it before any lawsuit arises. And so crypto, I'm assuming would be the same. So for example, I'm not one of those crypto heads and do all these creative, fancy things with crypto. I pretty much go to Coinbase and buy on Coinbase and whatever, right? And I don't tend to sell too much, right? How does that work?

Starting point is 00:17:40 So there's a bank that we work with in Switzerland that will allow you to custody crypto through them. Okay. Or they can use a third-party vault and just keep it in cold storage in a vault somewhere outside the United States as well. Yeah. So I'd probably just put it in a vault, I would guess. That's fine. You can keep it cold storage in a vault internationally as well.

Starting point is 00:17:57 Yeah. But you wouldn't be able to, I guess you did say you could actually trade because you become the beneficiary and you actually can trade. So the trust can appoint an investment advisor and typically they will point the client as the investment advisor. In no way does this compromise protection, doesn't give you the ability to withdraw funds, but you can decide how your money's invested. So even with the trust, you can invest in anything you can invest in right now. That's amazing. It is amazing.

Starting point is 00:18:20 Guys, you guys got to be listening to this, right? This is Harris Law Firm. This is everything. I'll tell you, I don't care. And so I guess let's speak to the people that are watching this, listening to this. Some have a high net worth, some maybe not. Some might be just getting going in business. But they need to be thinking through this from the day one. And if you weren't thinking through this from day one, first, let's right away tell them where to find you, where you want them to go to just find you out of the gate.

Starting point is 00:18:48 Okay. We're doing this in the middle of the podcast. We're not waiting until the end. No, because I want people to know exactly right now. Right now. In case they can't finish the damn thing, where to find you. I have no problem with that. Blake Harris Law.

Starting point is 00:18:57 That's my Instagram. That's my TikTok. That's my YouTube. That's my Facebook. That's my ex. That's my website, BlakeHarrisislaw.com. Fill out a contact form. A member of my team will reach out to you very soon. As long as your net worth is over a million dollars, you're here for most of various students. If your net worth is close to that,

Starting point is 00:19:14 we may reach out to you as well. Yeah. And so I think the second part of the question I was going to ask right now is where's that threshold of you being willing to take on a client? You said you just got your first billionaire and you said you have a couple of clients that maybe are less than a million. What do people need to be thinking through? And I think maybe even if you want to define for some people, and I can't either, I can't too, but how do you define net worth? Okay. So in order to justify having a Cook Islands trust, it generally takes at least a few hundred thousand dollars. There's no set minimum. If somebody came to me and said, all I have is enough money to pay your fee, Blake, I'll gladly take you on as a client.

Starting point is 00:19:55 Sure. However, I don't want to take clients on who are not seeing a benefit or it's not a good ROI for them. Now, if they don't have any money right now, but they have a deal that's about to close for a million dollars or $10 million, whatever, they're going to inherit some money and they want to have the trust set up, or we have had work with clients who are receiving a large settlement, they don't have any money right now, but they know they need the trust. We've set it up and they have very little money. So what do I look for in terms of net worth to justify it? It's generally the amount of unprotected assets.

Starting point is 00:20:25 If they've got a million dollars in their retirement account and a million dollars in their Florida home, we don't really have a lot that we're protecting for them. So I'm going to advise them probably not to set up a offshore trust. If on the other hand, they have half a million dollars and it's liquid and it is vulnerable to attack and they are concerned that their 17-year-old who's driving their car is going to cause a car accident, or maybe already did, or that their spouse is about to file for divorce, or that they have some business partner who's getting upset at them, or for whatever reason, they're the target of some issues, then yes, they get great value out of it.

Starting point is 00:20:59 In that case, spending $20,000 to $30,000 to set up an offshore trust to save half a million dollars, well, that's maybe one of the best investments you ever make. And in some cases, a few hours of asset protection planning can do more to preserve a family's wealth than decades of working. I love this. It's just so crucial for all entrepreneurs, regardless of the vertical, is... So what I always tell people is keep more of the money you make. And this is in the same vein of that. Now, I usually am talking about taxes, but this is the same vein. Made the money. Don't let someone else or an entity or whatever come after it because some small little mistake or even just because they want to and you didn't even do anything wrong. You want to keep your money that

Starting point is 00:21:38 you make. You work hard for it. There's an image of a beautiful mansion on a beach with beautiful cars parked out front. And it says, after decades of hard work, a doctor was able to buy all of this for the attorney who sued him. Yes. Now, the trust itself is tax neutral. Common misconception that you could use an offshore trust to avoid paying income taxes. And if that was true, I would do nothing but set up trust to avoid paying income taxes. But unfortunately, there's no way to legally use an offshore trust as a U.S. citizen to avoid paying income.

Starting point is 00:22:09 Yeah, because the income was made here. So regardless of you putting in the trust, the IRS can say you made the money here, you pay us. Well, regardless of where you make it as a U.S. citizen, you are taxed on worldwide income. Right. So you're going to be taxed. I go and speak in Paris on stage and I charge 50 grand as a speaker fee. I'm in Paris making that 50 grand, but because I'm a citizen, I get taxed. Yes.

Starting point is 00:22:31 As much as it is a passport, it is a prison card. So the trust itself is tax neutral. It does not increase your taxes. It does not decrease your taxes. You do have to report to the IRS that you have an offshore trust in Finson, that you have an offshore bank account with a lot of FBAR. We provide our clients with a detailed memorandum on how to complete all the reporting requirements. If their current CPA is not comfortable completing those reporting requirements, we refer them to someone who can complete the reporting requirements. But it doesn't increase

Starting point is 00:22:56 your taxes. It's just kind of the cost of getting the protection that you need. I think there's some misnomers, right? There's some hearsay about you know and again i use this because it's so popular but like wolf wall street and people that make all this money and they put all this money in trusts and that's how they can come out of jail and still have all this money talk maybe it's true maybe it's not but talk about some of those maybe more uh i don't know pop culture type of phenomenons about like oh well if you, if you get rich, you put it there. Even if you go to prison, you can come out of prison filthy rich still. Is that even true? Is that something that happens?

Starting point is 00:23:31 I don't know. Is that something you can talk about? I'm going to talk about whatever I feel like talking about, and I'll do this in person. I'll do this on camera. There was a time when attorneys would shy away from advertising because it was taboo. I think attorneys who are unwilling to go on camera are the ones you should not trust. Amen to that. If you are willing to stand by what you say and put it on video, then you really believe it. Totally. So can that happen? Sure. Can a car be used by a criminal to run someone over? Sure. It doesn't

Starting point is 00:23:59 mean that cars are a bad thing. The trick though is getting everything set up before issues arise. If you set up a trust and you don't have any pending criminal issues and you don't have any pending lawsuits, it will protect you even if later down the road you have some issues. Trust companies, they don't want to work with somebody who has stolen funds. If you've stolen some money, the trust company is not going to want to protect that. The bank's not going to want to put it away. Now, if you have a small issue in your past, you had a DUI, you got caught with some pot, something minor, we can still get everything set up for you. But the trust companies, my law firm, the banks, we don't want to work with criminals. For sure.

Starting point is 00:24:37 But if somebody later gets into trouble, generally, the trust will still protect them. They can go to prison, come back and still have some money. I mean, not that anyone should be doing anything illegal, right? But that's more for pop culture. I guess that's more just for curiosity. And that's the vast minority of them. The majority of our clients who we work with are business owners that worry about protecting their family. They are aware that there are frivolous lawsuits out there. When people get into the ethics of offshore trust, I mean, I've addressed this already, but I'm going to flip the coin now and say, let's look at the ethics of the legal system. How easy it is to stir up

Starting point is 00:25:13 litigation. How easy it is to extract money from someone. How easy it is for an employee who got fired because they were doing a bad job, then to come back and fabricate a claim, exaggerated claim, maybe with other employees who got fired as well. It's too easy. And I get a lot of calls from people in California who are just saying, you can't run a business here anymore. And it's very unfortunate that people are no longer wanting to provide goods and services and improve the economy and improve people's quality of life because they fear litigation. It would be great if there were some system-wide changes to our legal system and business owners could conduct their business more confidently. I don't see that happening because the American Trial Lawyers Association very much has their

Starting point is 00:25:54 power over Congress, and they're not going to be doing anything that makes it harder for them to sue and get money out of people. But what can be done is people can take action on an individual level to protect themselves. And this is something I very much preach, self-responsibility. Blake Harris Law. The other thing that I think is really important here is the concept of what I kind of briefly, well, let me rephrase the question. You mentioned people don't know if it's ethical or moral. Who are they? What is their hiccup here? Because I don't, I've talked to you now for a whopping 26 minutes and I say, this is just brilliant. It is smart business. It is how you should look at your life. You're working your entire life to make money, to create wealth,

Starting point is 00:26:42 to create a legacy, but you're willing to just not protect it and let someone come in and take it when you're not looking. You know, when you start a business, the first thing anybody's going to tell you is go form a corporation, go register an LLC. Well, why should I do that? So you don't get sued. You start making a little bit more money. Somebody along the way may say, hey, set up a trust, set up a domestic trust in Nevada, Wyoming trust, and nobody really blinks an eye at that. But as soon as someone says, well, go outside the United States to set up your trust, it's, well, what's going on here outside the United States, Cook Islands? Where is this place even located? It goes back to what I said. A lot of Americans just can't simply think beyond the box.

Starting point is 00:27:18 They're programmed to think that the world starts and ends with the United States. The people who are going to be more successful in the decades and century ahead are those who can think beyond the United States for solutions to the problem. I just, I think some of it has to do with like the folklore of what the, in some of the questions I've asked about like the Wolf of Wall Street, right? Like the folklore of people who are doing illegal shit or hiding it in offshore accounts, not the other way around where smart people are protecting it in offshore accounts, right? So I think some of that just has to do with pop culture, folklore, right? Stuff like that. Would you agree to that? So I'm going to ask you a question,

Starting point is 00:27:56 Justin, now that I've mentioned Cook Islands about 10 times and Switzerland about 10 times, which country do you think hides the most money? Which country do you think is the number one destination for offshore planning? Cayman Islands. United States of America. There's more money that is not being reported to taxing authorities throughout the world here in the United States than anywhere else. There's more offshore structures set up here in the United States for people from elsewhere in the world than here in the United States. So other countries set up offshore accounts in the United States? Correct. There's people-

Starting point is 00:28:29 For the same thing, just different side of the- For the same thing. Asset protection. And even a lot of that is tax evasion. People who are trying to evade other countries' taxing authorities where maybe they don't have the power that the United States IRS has. They come and they put the money in the US banks. I don't do any of that type of work. I'm helping U.S. clients move money to other countries. We don't do tax evasion from the U.S. IRS or from any country in the world. Of course not. We'll take on any domestic, any private party, but we don't protect money against the federal government because that's not legal to do so. Where's the threshold where, because I mean,

Starting point is 00:29:02 so I have a trust here in the US, where is the boundary or where would you suggest someone like myself or people watching, where does that become a pointless venture versus the offshore account? What is the difference between the two? Maybe let's talk about the difference between the two. So people can understand the clarity of it all. So I'm going to first address the different types of trusts. There's the revocable living trust, which is great for estate planning purposes. This is not what my firm focuses on, but if you have children, if you own a piece of real estate, contact your local estate planning attorney, set up a revocable living trust.

Starting point is 00:29:38 You would say that specific trust. You should go set up that one. Yes. I mean, it's pretty basic. It's like having a will. It's like having a power of attorney. That's exactly how, by the way. Basic estate planning documents that can cost you a few thousand dollars or so. And I think it's something that most everyone should have if you either have children or at least own a home.

Starting point is 00:29:56 Yep. Now, in terms of asset protection and finding the right jurisdiction, let's do a quick analysis of this. You've got the domestic options and the offshore options. And when people are saying bad things about the offshore planning and how it's used by criminals, I think a lot of people who are pushing that are actually the domestic planners. And I will tell you, as an attorney, it's a lot easier to sell and convince somebody to set up a domestic trust than an offshore trust. That's not my strategy. My strategy is a long-term game. And what I want to do is set up a structure for my clients where the clients are going to come back to me and say exactly what I've heard from other clients, which is, Blake, this trust worked

Starting point is 00:30:37 exactly as you said it was going to work. We were able to protect all of our assets. We were able to get a very good settlement because of this planning. The issue with domestic trust is a domestic trust can be, and case law backs this up, and it has been disregarded by a US court. Under Article 4, Section 3 of the US Constitution, every state has to give full faith and credit to the orders of every other state. So if you set up a Nevada trust or Alaska trust or Wyoming or Delaware trust, there's about 18 different states where you can set up a domestic asset protection trust. It is possible that a court in the United States could order the trustee to hand over the assets. You also have- Because they all have to work in good faith based around the constitution.

Starting point is 00:31:20 Well, because a US trustee is going to comply with the US court order because they don't want to be put in jail. That's right. If you have a plaintiff who's coming after you and you tell them that your assets are in a domestic trust, they're probably going to still be pretty aggressive in coming after you. But if you have your assets in an offshore trust, they're going to talk settlement. They're not going to get paid in the Cook Islands. You can only practice in the Cook Islands if you're licensed in the Cook Islands or in New Zealand, to go and practice in the Cook Islands. Your U.S. attorney doesn't want the case to go on there because

Starting point is 00:31:48 they're not getting paid. No contingency fees over there. So, the difference between a domestic trust and an offshore trust is this. One of those trusts can be disregarded by the U.S. courts. The other one will not break under pressure from the U.S. courts. Let's do a quick analysis of which offshore jurisdiction, because there's dozens of different countries where you can set up an offshore trust. I visited probably 40 to 50 countries over the course of my life. I have relationships with people in trust companies and bankers and investment advisors and CPAs and attorneys all over the world. I've spent over a decade in this industry developing a network that I provide to my clients that helps them safeguard their assets and in researching and understanding why we choose Cook Islands for 99% of our clients. In terms of codified good laws for asset protection where Americans routinely set up trust, there's three jurisdictions.

Starting point is 00:32:44 Cook Islands, Nevis, and Belize. You also hear Bahamas get mentioned. I don't know why anyone would set up a Bahamas trust when there's other options out there. Cayman Islands, you get mentioned as well, but it's not a very good asset protection jurisdiction. It takes at least six years before you get any protection to Cayman Islands, even then it's a country where the judiciary doesn't really support and like the business. If you're going to set up a hedge fund, look at Cayman Islands or BVI. But for asset protection, Cook Islands, Nevis, and Belize. Belize has a great law in place. However, it's not the best place to do business. It's basically like doing business in Mexico. The regulators are inconsistent.

Starting point is 00:33:21 The banks are not safe. I have done a bit of business down in Belize. In some circumstances, we would set up a Belize trust, but it's not the ideal place to have the person who controls your entire wealth live. There's just not a good place to do business. Nevis. Nevis has essentially the same law as the Cook Islands. They copied the Cook Islands law about 15 years after the Cook Islands passed their asset protection law. So if you were to read both laws, they appear pretty much identical. The difference between the Cook Islands and Nevis, though, is the mentality of the government towards the asset protection business. not to pass some new legislation. They've threatened to pass legislation over the past few years, which would greatly water down the protective nature of their asset protection business. Right now, Nevis is doing quite well selling passports. Golden Passport Citizenship by Investment Program is bringing a lot of money to the Navitian government, and they are not as

Starting point is 00:34:21 committed to the asset protection industry as the Cook Islands, who has never and probably never will sell a passport. Asset protection is vital to the Cook Islands. It's the reason why I said 99% of our clients, we use the Cook Islands. It's the reason why we're actually in the process of migrating pretty much all of our Nevis or all of our Nevis Trust to the Cook Islands. Love that. I think the clarity that everyone needs to understand, revocable living trusts, which I have, married, kids, house, assets, great. That is almost like, to me, how I view this, by the way, that is almost if I die, things are in order,

Starting point is 00:34:59 my wife can take over. Correct. Incapacitation or passing away, it helps with that, makes that a smoother transfer. Offshore accounts, I'm making some money. I have potential to make even a lot more money and I want no one to get their damn hands on it no matter what happens. Offshore trust actually benefits you during your life. It's not just for everyone else once you pass away, which is a very good thing to do, but you need to have your money so that you can make more money, so that you can enjoy your retirement, so that you can be at peace of mind every single day when you're bringing podcast guests on here who may say something that somebody doesn't like and cause a lawsuit. And so, yes, an asset protection trust is going to allow you to run your business more confidently

Starting point is 00:35:38 and will give you the peace of mind to know that your money's there for you. Everyone watching this, everyone listening to this, go to BlakeHarrisLaw.com. This is Blake Harris himself. This might've been one of my favorite episodes because I'm sitting here just geeked out about this whole thing because I want to make a whole lot more money and I want to keep the damn money that I make, right? So dude, thank you very much for coming here. Again, let everyone know where else to find you. One more time. So the website is BlakeHarrisLaw.com. The phone number is 833-ASK-BLAKE. You can also slide into my DMs on Instagram, Blake Harris Law. Same is true for TikTok, X, Facebook, LinkedIn. I'm very active on social media, post probably one or more videos every single day on NASA protection. Also, just

Starting point is 00:36:22 you can keep up to date with my travels. I even share a little bit of humor in those videos as well. Brother, I appreciate you being here. We're going to have further conversations. If you like this and you were able to take one or two good ideas that you know a couple of your friends need to know, make sure you share this episode with your friends, at least two of them. From now on, I will be coming back with another hot guest. Make sure you come to the next episode.

Starting point is 00:36:46 Peace.

The Entrepreneur DNA - Offshore Trusts Explained: How to Legally Protect Your Assets | Blake Harris | EP 41

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