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EQUITY STRIPPING
International asset
protection strategies are effective primarily because they involve the
physical transfer of an asset to a safe and secure foreign locale where
the asset is beyond the jurisdiction of a U.S. court.
Thus, for example, money may be wired offshore in order to be completely
protected from a U.S. creditor. Real estate, however, cannot be moved.
Although it is physically impossible to transfer real estate to a foreign
jurisdiction, you protect the real estate by turning it into cash, and
then you can protect that cash by transferring it offshore.
This can be done by either selling the real estate or by taking out a
mortgage on the property.
The
equity is thus separated from the property, i.e., equity stripping, and
then protected. The proceeds of the sale or mortgage should be protected
offshore via a number of effective strategies, such as offshore asset
protection trusts or foreign
deferred variable annuities.
If the real estate is mortgaged and the proceeds are protected offshore, a
creditor will be frustrated because any judgment it may receive would be
subordinate to the security interest of the mortgagee.
As with other effective asset protection strategies, the creditor will be
more inclined to settle upon terms favorable to you, rather than receive
nothing!
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