Asset Protection for Real Estate and Commercial Interests
September 2014
Cash and marketable securities can be moved by wire. Real estate and operating businesses cannot. The standard technique converts the illiquid equity into transferable proceeds without disturbing the underlying enterprise.
Asset protection for cash and marketable securities is straightforward: a foreign asset-protection trust or an LLC with a bank account can hold the liquid assets. The harder problem is the equity in a house or in an operating business — assets that cannot be wired and whose disposal would disturb the very enterprise the client seeks to continue operating.
The most common solution is to pledge the asset as collateral for a loan and transfer the loan proceeds into a foreign asset-protection trust or LLC. Nontransferable equity is converted into liquid, transferable cash that can then be parked with an offshore custodian. The underlying property remains in place, in the client’s name, available for use; what has moved is the equity, in the form of proceeds.
The firm works with a network of financial institutions dedicated to serving its trust and LLC clients. Several offer financing for real estate, businesses, and other valuable immoveable assets located in the United States. The loan process typically takes less than thirty days. Clients undergo a standard credit check while the property is appraised; once funds are advanced, clients may choose from a number of deposit structures at competitive rates. Clients with strong credit frequently find the cost of maintaining the debt is less than the interest earned on the deposit.