The firm’s role in the form.
Asset-protection LLCs trace their commercial origin to drafting work the firm undertook with the legislatures of small common-law jurisdictions. We originated the asset-protection LLC as a distinct subspecies of the limited liability company — a vehicle whose statute makes the charging order both the exclusive creditor remedy and a remedy meaningfully constrained by procedural barriers. We also introduced the concept of the LLC protector — a position analogous to a trust protector, holding watchdog authority over the manager without holding equity — which is now a regular feature of LLC planning worldwide.
Why an LLC, when a trust would also do.
Transfers into a trust are, by their nature, gratuitous — gifts, in the eyes of fraudulent-transfer law. In several U.S. jurisdictions, courts have held that a transfer into an asset-protection trust is per se a fraudulent transfer, providing creditors with a domestic judgment they can use to pursue the trust's downstream holdings. The asset protection LLC sidesteps the gratuitous-transfer problem: a client contributes assets in exchange for a membership interest, retains an economic stake commensurate with that contribution, and engages an arm's-length manager to handle the entity's affairs. The resulting structure relies on a different doctrine — the charging order — and the jurisdictions in which we work treat that doctrine seriously.
Nevis — the 2015 LLC amendments.
The 2015 amendments to the Nevis Limited Liability Company Ordinance, drafted with the involvement of our service team, installed a particularly considered framework:
- A creditor must establish, beyond a reasonable doubt, that the debtor-member was insolvent at the time of the transfer to the LLC — and the value of the LLC interest itself is included in the net-worth calculation.
- A creditor must post a bond of EC $100,000 to bring a fraudulent-transfer claim against a Nevis LLC.
- A two-year sliding-window statute of limitations forecloses creditor claims over time.
- Charging orders expire after three years and may not be renewed.
- A creditor has no right to interfere in LLC management or reach LLC assets directly.
Belize — modeled on Wyoming, with teeth.
The Belize International Limited Liability Companies Act tracks the Wyoming approach in its essentials, and adds a handful of provisions that go further:
- A capital contribution to a Belize LLC is not vulnerable to a fraudulent-transfer challenge.
- A creditor seeking to reach Belize LLC assets must post a bond equal to fifty percent of the claim's value, or US $50,000, whichever is greater.
- All fraudulent-transfer claims — even those addressing non-capital transfers — are barred after the LLC's first anniversary.
- A creditor cannot bring a foreign judgment against a Belize LLC in Belize.
- Statutory duress provisions protect the LLC if its members or managers are placed under compulsion in another jurisdiction.
Wyoming — the domestic option.
Wyoming pioneered the modern LLC in 1977 and has continuously reaffirmed the charging order as the exclusive remedy available to a creditor of a member, including in the single-member context. For clients whose facts call for a domestic vehicle — usually some combination of tax, banking, or counterparty considerations — Wyoming is the firm's seat for APLLC work in the United States.