The science behind the asset protection program offered by AssetWard is the Wyoming Declaratory LLC℠, a specialized form of limited liability company that does what no other other LLC can do:
- A manager-managed LLC in which you are the manager
- Membership interests may be held by you, your family, a trust, or even another LLC
- A foreign custodian – one of the world's leading international asset protection trust companies – is granted special rights under the LLC formation and governance documents to protect both the LLC and its membership interests from the reach of creditors
- You can appoint a protector to monitor and replace the foreign custodian as desired
Frequently Asked Questions
Asset Protection Explained
Depending on the nature of the liability, insurance may protect you. We always encourage our clients to maintain suitable levels of insurance (including an umbrella policy). However, insurance policies usually contain exclusions that deny coverage in many common instances. For example, a personal policy (including umbrella policy) typically denies coverage for business-related claims. Many business policies deny coverage for claims arising from the use of a motor vehicle.
Asset protection planning is a useful tool to help shield assets when insurance is unavailing.
Costs & Fees
The first year fee of $950 includes everything needed to implement a comprehensive asset protection plan using the AssetWard LLC:
- Formation of a Wyoming declaratory limited liability company
- Registered agent service for one year
- A physical and mailing address for the LLC for one year
- A comprehensive declaratory LLC operating agreement designed by several of the world's leading asset protection lawyers and advisors
- Foreign custody for membership interests with a licensed trust company for one year
- Template documents to assist you in transferring assets to your LLC
Each year thereafter, the $450 annual renewal fee covers the essentials:
- Renewal of the LLC's registration in Wyoming
- Registered agent service for one year
- A physical and mailing address for the LLC for one year
- Foreign custody for membership interests with a licensed trust company for one year
Tax Aspects of the Asset Ward LLC
Like any other LLC formed in the USA, the Declaratory LLC℠ from AssetWard is subject to the "check-the-box" rules under US federal income tax law. If the LLC has only one member, it is treated as a disregarded entity. If the LLC has more than one member, it is treated as a partnership. Regardless of the number of members, the LLC may elect to be taxed as a corporation if desired.
If the LLC is taxed as a partnership or corporation, then a tax return is filed. If the LLC is taxed as a single-member disregarded entity, no return is filed for the LLC, and the LLC's income and activities are reported on the tax return of the LLC's sole member.
Foreign Custody of Your LLC Membership Interest
We have partnered with a leading offshore trust company, Lighthouse Trust in Belize, to offer foreign custody for your LLC membership interest. Once your Declaratory LLC℠ is established and you sign the membership documents, you mail your membership interest to us, and we deposit your membership interest with the foreign custodian for safekeeping.
No. The foreign custodian does not agree to act as a trustee, but only to act as a custodian for your membership interest. However, the LLC governance documents give the foreign custodian extensive rights to ensure that the custodian can act to protect your membership interest in the event of a creditor threat.
Banking
The Declaratory LLC℠ can open a bank account like any other Wyoming LLC. Most major banks, including many online banks, offer account services to Wyoming LLCs.
When you purchase your Wyoming Declaratory LLC℠, you will be furnished with a complete set of documents and a "how to" manual that lists several banks that offer account services for our LLC clients.
The Manager of the LLC controls the bank account.
Unless you have appointed our LLC management affiliate as a Manager, we do not have access to, or control over, your LLC's bank account.
Yes. AssetWard has teamed up with a select group of overseas banks to provide full banking and investment account services for our LLC clients. Account minimums apply at several of these institutions.
When you order your Wyoming Declaratory LLC℠, our user guide will provide complete contact details and known account minimum requirements for several international banks.
Creditor Claims and Litigation
Under Wyoming LLC law, a creditor of an LLC member is limited to a charging order. The charging order simply requires that any distributions that the LLC manager authorizes to be made to an LLC member instead be directed to that member's creditor.
The charging order does not authorize the creditor to interfere with LLC management or to compel a distribution where the LLC manager refuses to do so. Moreover, the charging order is the exclusive remedy for a member's creditor; the creditor cannot sell a member's interest or foreclose on the LLC.
If the creditor threatens your AssetWard LLC over a claim it has against a member, please refer to our FAQ on "What Happens if a Creditor Threatens Me?"
If the creditor has a direct claim against your LLC, we recommend that you notify the foreign custodian of your membership interest. When you purchase an AssetWard LLC from us, you will receive complete documentation along with contact details for your foreign custodian.
The foreign custodian is able to act in ways that you may not be able to when faced with litigation. The custodian may establish a trust for the benefit of LLC members, or the custodian may even migrate your LLC from Wyoming to a foreign jurisdiction such as Belize, which has some of the most protective LLC laws in the world.
In addition to notifying your foreign custodian, we always recommend that you retain the services of an experienced litigator. You are always welcome to contact a member of our LLC services team to obtain a referral to a qualified lawyer who can defend your LLC. Please be aware that you are responsible for the costs of such defense.
The Basics of the AssetWard LLC
A "Declaratory LLC℠" is a limited liability company that has been structured in several ways to enhance asset protection planning. Among the key distinctions of a Declaratory LLC℠ are the following:
- Members can appoint a Protector to help shield the LLC and its assets from creditor threat.
- A foreign custodian (a licensed trust company) holds the membership interests and has special rights that favor the foreign custodian over any interested creditor.
- The foreign custodian may rely on special provisions in the LLC governance documents to declare that the member's interest is held in a foreign asset protection trust for the member.
- The foreign custodian may even migrate the LLC from Wyoming to a foreign asset protection jurisdiction (such as Belize or Nevis) under certain circumstances.
The foreign asset protection trust (FAPT) has proven to be the most popular planning technique for wealth preservation over the past 40 years. When properly structured, its resilience to unanticipated claims is unsurpassed. However, its popularity has waned over the years due to a number of developments:
- Cost: Most experienced asset protection lawyers charge as much as $100,000 or more to design an FAPT. Your foreign trustee will then charge, on average, $5,000 per year to maintain your FAPT. By comparison, the AssetWard LLC is $950 the first year, and $450 each year thereafter.
- Tax Reporting: FAPTs trigger expensive reporting requirements under the Foreign Account Taxpayer Compliance Act (FATCA) and Foreign Bank Account Report (FBAR) rules. In addition, each year a trust tax return must be prepared by a return prepared experienced with international trusts. This easily adds thousands of dollars to the annual cost of maintaining an FAPT. By comparison, your AssetWard LLC incurs none of these expenses.
- Identity Disclosures: When you set up a FAPT, you must provide your foreign trustee with copies of your passport, utility bill, tax identification documentation, bank references, professional references, and a detailed history of your income and assets. Your information is subject to inspection by foreign regulators and banking institutions. By comparison, you do not need to provide any such documentation for an AssetWard LLC.
- Litigation: US courts have become increasingly familiar with the FAPT as an asset protection device. Judges often threaten to hold FAPT clients in contempt if they do not get the foreign trustee to return the assets. The foreign trustee may resist the demands of a US judge, but the FAPT client may have to sit in prison and wait out the litigation. By comparison, the AssetWard LLC is the most popular form of business entity there is – the Wyoming LLC – that judges are less likely to question. If a judge threatens the AssetWard LLC or its members, the foreign custodian is empowered to establish a trust for its members and to even migrate the LLC away from the US.
- Control: When you create a FAPT, you hand control of your wealth to a foreign trustee. You are likely to incur substantial fees if you run into a dispute with your foreign trustee, or seek to change or terminate your foreign trustee. By comparison, you remain in control at all times of the assets of your AssetWard LLC.
Given this information, it should not surprise you to learn that the LLC is an increasingly popular alternative to the FAPT.
Maintaining Your Asset Ward LLC
You name the manager(s) of the LLC when you first order the service from us.
Using an LLC Protector
A Protector is a common role featured in international trusts, and is now increasingly used with LLCs for asset protection reasons. The Protector is someone who is not an LLC member or manager, but who looks out for the welfare of the LLC and its members. Typically the Protector has the power to grant or withhold consent to fundamental changes to the LLC.
Our comprehensive LLC governance documentation includes provision for a Protector of your Wyoming Declaratory LLC℠.
Yes. We offer a Wyoming-based Protector for $250 per year.
If you prefer a foreign protector, we have partnered with Lighthouse Trust to offer Protector services through Lighthouse Protector Services, a company based in the international asset protection jurisdiction of Nevis. They charge $1,000 per year to serve as a Protector.
While literally anyone in America can be sued, the LLC governance documents are carefully tailored to shield the Protector from the hazards of litigation. The Protector never receives any LLC property, and the Protector has no authority to command the LLC or its Manager to do anything.
The Protector has an "affirmative" power to remove and replace the foreign custodian of LLC membership interests. This power is designed to help protect you should you decide at some point in the future to replace your foreign custodian or terminate the custodian's services altogether. However, the foreign custodian is empowered under the LLC governance documents to disregard any direction by the Protector that is made under duress, such as pursuant to a court order.
Asset Transfers & Funding Your LLC
Our documentation includes template assignment forms for a variety of assets that can be transferred into your Wyoming Declaratory LLC℠.
Yes, but – because real estate cannot be relocated to Wyoming – important jurisdictional issues must be carefully considered. In most instances, clients form a separate LLC where the real estate is located, and transfer ownership of that LLC to their AssetWard LLC.
Example: Robert sets up a Wyoming Declaratory LLC℠ in Wyoming to hold the following assets:
- Cash: Robert opens a bank account in the LLC's name and transfers cash into the LLC's bank account.
- Securities: Robert opens a brokerage account in the LLC's name and transfers securities into that account.
- NY Real Estate: Robert owns a rental property in upstate New York. He first creates a New York LLC. He then titles the property to the New York LLC. Finally, he transfers the sole membership interest in the New York LLC to his Wyoming Declaratory LLC℠.
Working With a Lawyer
While you don’t need an attorney in order to utilize our services, implementing asset protection strategies often requires legal expertise. We encourage clients to work with a lawyer who is experienced in asset protection.
We emphasize the word "experienced." Many lawyers who claim to be well-versed in asset protection planning have little to no experience defending their own work in court.
In order to keep our prices as low as possible, we do not offer legal advice. Our services our part of a "self-help" program in which we provide you a standardized set of documents for you to implement on your own or with the assistance of a lawyer.
Our staff includes experienced asset protection lawyers. In addition, our standardized documents have been developed with the assistance of some of the world's leading asset protection lawyers. However, we do not offer legal services through AssetWard.
When you purchase a Wyoming Declaratory LLC℠ from us, we provide you with complete contact details for our domestic and international service teams. They are on standby 24 hours a day, 7 days a week, and are ready to respond in an urgent situation.
We are not a law firm and do not provide legal services ourselves. However, we can refer you to experienced litigators who can assist you with a claim against you or your LLC. Please be aware that you are responsible for any costs incurred with engaging counsel.