No Direct Ownership. Anyone can create a Nevis LLC, but if you don't structure the ownership properly, it will be easy to discover and attack. The best way to structure the ownership is to put it in a Special Power of Appointment Trust (or "SPA Trust"). This is a legitimate way to keep the ownership completely off of your personal financial statements. For more information about the SPA Trust, click here: SPA Trust Provides Better Asset Protection.
No Fraudulent Transfers. No asset protection plan can be relied upon if you make a fraudulent transfer. We can design a plan to help you avoid a fraudulent transfer.
No Frivolous Lawsuits. U.S. court orders are not effective in Nevis. U.S. contingent fee lawyers cannot practice law in Nevis; only Nevis citizens can practice law in Nevis. Moreover, anyone attempting to sue a Nevis LLC must first post a $25,000.00 bond. After posting the bond, the potential plaintiff must then submit a legal brief arguing why the lawsuit should be permitted. If the court determines that the suit is unwarranted, it will not be allowed to proceed and the bond will be forfeited. Due to these rules, frivolous suits are virtually non-existent in Nevis.
No Creditor Wants a Charging Order. Even if a creditor won a judgment against you in a Nevis court, the exclusive remedy available to a creditor against your interest in a Nevis LLC is to obtain a charging order. A charging order means that the creditor gets any distributions which are made, but the creditor cannot ever force a distribution to be made from the LLC. If a creditor does obtain a charging order against your interest, Nevis law would require the manager to send the U.S. income tax liability for your interest (IRS Form K-1) to the creditor, even if no distributions are ever made to the creditor.
No Risk from Other Members or from the Manager. Your Nevis LLC will be structured so that no one but you has any knowledge, access or control over your assets. It will also be designed so all the income and deductions from your assets are allocated exclusively to you. We can help you and your CPA understand all tax ramifications, options, and reporting, although the Nevis LLC generally has no affect on your income taxes.
No Offshore Stigma. The members and managers of a Nevis LLC are not public record, which provides for complete confidentiality. Also, a Nevis LLC is not subject to the onerous reporting requirements for offshore trusts. Your Nevis LLC can be designed in a manner so that no one has to know that your LLC is registered offshore unless you tell them.
No Worries. Nevis is politically and economically stable, they have modern technological infrastructure, major international banks, strict privacy laws, warm Caribbean weather, and really nice beaches!
No Way! Lets examine a worst case scenario with a very aggressive creditor:
A creditor looks for deep pockets to sue. Because you have on ownership in the Nevis LLC, you do not appear to be a very good target. Many creditors stop right there because of the significant costs of litigation and the small chance to recoup those costs.
If the creditor sues you anyway, wins a judgment against you in the U.S., discovers the Nevis LLC, and attempts to attack your interest in the LLC, the manager simply informs the creditor that this is a Nevis LLC, that they do not recognize court orders from the United States, and that they cannot disclose any information about the LLC or its members. Once again, most creditors will stop there.
It is possible that an extremely aggressive creditor could hire legal counsel in Nevis, post a $25,000 bond with the Nevis court, and re-try the original lawsuit in Nevis. If the creditor wins that case and seeks a charging order, we could simply change the manager to another jurisdiction (such as the Cook Islands) which does not recognize court orders from the U.S. or Nevis. And the process continues as described above.
If a creditor catches up with the LLC and obtains a charging order against your interest in the jurisdiction where the LLC and the manager reside, you can continue to manage your personal LLC, refuse to make any distributions to the creditor, take loans or management fees as needed, and send the K-1 each year to the creditor.
I am an asset protection attorney, a tax attorney, and a law school professor. I do asset protection planning that is ethical, professional, efficient, thoughtful, and eminently effective. I will provide ongoing support for any plan that I create. If you are interested in asset protection planning, call me or send me an email with a summary of your situation and I will send you a free proposal designed just for you.