For those high risk and net worth investors (Doctors, Lawyers, Dentists, chiropractors, etc) The Bridge Trust is really the most secure Asset Protection system available. This is because it combines both domestic and foreign trusts.
The basics of this type of asset protection trust allows the beneficiaries access to assets in the Trust for their benefit unless an "Event of Duress" occurs. this means any action or activity that threatens the Trust assets. a lawsuit.
When a lawsuit happens, a secondary set of rules that are predetermined called 'triggering events' in the trust are activated so that legally the creditor and the courts are blocked from any access to the Trust assets. During this time, the clients remain the beneficiaries and may still indirectly access Trust assets. (for example: the Offshore Trustee may lease a car for the beneficiary, rent a home or pay credit card bills of the beneficiaries. The net effect is that the Trust assets are permanently preserved for the Trust beneficiaries and completely protected from unauthorized court proceedings and creditors. This is known as The Bridge Trust (TBT).
If triggered by a threatened lawsuit, The Bridge Trust, serving as the majority limited partner, typically pulls the client's assets out of the U.S. jurisdiction by legally transferring them to a foreign jurisdiction under the administration of a foreign Successor Trustee. This occurs without the loss of beneficial ownership or distributive rights by the grantor. Importantly, client assets that are in a holding company never have to leave the U.S. unless the trust is "triggered" by some crisis. Once the threat ends, The Bridge Trust can be re-domesticated to the status of a U.S. grantor trust if the client so desires. It is this working relationship between the domestic and foreign trust and the successor trustee that makes the Bridge Trust to powerful.
When it comes to asset protection, advance planning is a must. Only assets in the Trust will avoid probate and be protected from future fiscal emergencies. Importantly, funding may occur only when the client has no claims pending, threatened, or expected. Once funding is complete, the client must be able to pay all reasonable anticipated debt from resources outside the Trust. Accordingly, the client must sign and notarize an Affidavit of Accuracy and Solvency before the Trust can be established.
The Bridge Trust may own sub-chapter S stock and annuities. The trust may also own personal residences without loss of tax-free capital gain or home interest deduction benefits. Unlike the Revocable Living Trust, The Bridge Trust, when holding title to a personal residence, can legally remove the equity of those residences to the protection of a foreign jurisdiction, if needed. While IRAs and other qualified retirement plans may not be placed in the trust, The Bridge Trust may be a primary or contingent beneficiary of such plans.
