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Asset Protection and Management of Luxury Assets
At some point of his life, any wealthy businessman may reach the point that he owns more assets that he can manage or even oversee. Just consider the case of Lionel Messi, the football superstar. Messi owns a mansion in Barcelona, a villa in Milan, a penthouse in Miami and now he has to acquire a new home in Paris since he recently signed with Paris Saint Germain (PSG).
Messi’s net worth is almost 300 million euros, according to the latest estimations. His wealth is composed of mansions, expensive cars, companies in the gastronomy business and even a skyscraper in his hometown in Argentina.
However, Messi’s business is to score goals and win titles, not to manage a restaurant in Miami or wash one of his Ferraris. International artists, CEOs and many successful people all around the world have a common problem: they have more money that they can spend or even handle.
What is the solution? Spend money like there was no tomorrow? Donate it to charity? Most people would give the money to a relative so he or she can manage it. However, the best solution is to give it to professionals, experts that will invest your money and have good returns at a relatively low risk, optimizing taxes while having full discretion.
Asset protection and management is a widely used service among billionaires and wealthy people, not only to manage their business, but also to safeguard luxury assets such as yachts, art, aircraft, etc. Expensive toys only available to the chosen people.
In this article, we will tell you everything you need to know about how to protect luxury assets and safeguard your wealth.
Why is Asset Protection Important?
Imagine you have a home in Mykonos, Greece, where you go one or two weeks a year for vacations. You also have a yacht and a small jet where you can travel small distances.
Also you have a penthouse in Brickell, the Miami financial district, a mansion in Sarasota, California, and a summer house in Dominican Republic. All of them are crowded with luxury cars, expensive art paintings, yachts and any other assets that you don’t remember you own.
These luxury assets, which can be worth millions, are susceptible to be seized if you experience legal or creditor issues, for example, a divorce or other lawsuits. This can be common among doctors, lawyers or business owners.
So, if you want to preserve your wealth and avoid the risk of these assets getting into hands of a creditor or a plaintiff, you must create a protection scheme that safeguard them from any seizure.
There are many options and tools for hiding and preserving your assets. The best way and structure will depend on your needs and profile. However, below we will tell you some options that are available.
Some Types of Asset Protection
Limited Liability Companies (LLC)
A great option for protecting your assets is the creation of an entity with a limited liability (a Limited Liability Company), which would allow you to separate personal assets from business.
Some perks of this type of protection are:
-The owner is not personally liable for claims against the business. This means that if you get a lawsuit while conducting the business, your personal assets will be preserved from any claim.
-In some jurisdictions, there is protection on the control of the LLC. This means that if a creditor wins a claim against the LLC, he or she can’t take control of the ownership of the LLC, only to the distributions.
LLCs are really useful for entrepreneurs and self-employed professionals to separate business from personal assets, granting a robust protection for their personal assets.
Trusts are considered by experts and most lawyers as the strongest asset protection tool. These entities offer a complex set of legal structures and laws really difficult to crack, making them almost invincible to crack.
An asset protection trust consists in the transfer of your personal assets to the trust, so you would not legally own them anymore. The trust would be managed by a third party trustee who would preserve and manage them.
As the beneficiary, you would still receive all the benefits that these assets and the
investment returns they produce. There are many jurisdictions that offer robust protection and high levels of confidentiality, such as Liechtenstein, the Cook Islands or Nevis. The best jurisdiction for your potential trust will depend on your profile and budget.
Certain retirement plans are often protected by federal law in the United States, being exempt from bankruptcy and offer you reasonable protection against lawsuits and creditors, and even tax benefits. However, the level of protection can differ between one state to another.
We could continue listing all day about more schemes and structures to protect your assets. However, in the end the best way to protect them is to be discreet about them.
Flaunting your wealth to the rest of the world can make you become a target from unsolicited lawsuits, a real headache.
About Our Partners
At Mundo, we have partnered with a longstanding consulting firm based in the Isle of Man. They provide a full range of high-quality and discrete sets of Private Wealth Management Services.
This firm is composed of some of the best consultants in the market, offering a multi-jurisdictional advice for high net worth families and family office that require a world class expertise in terms of wealth management
What can we do for you?
In Mundo, our mission is to give our clients world class advice that helps them to achieve financial freedom.
A robust asset protection is a key issue in the pursuit of financial freedom. That’s why we have partnered with a longstanding firm based in the Isle of Man, one of the most prestigious jurisdictions in Europe.
They provide a full set of Private Client Wealth Management Services, such as:
-International tax optimization
-Asset protection trusts
-Corporate and partnership structures
Our partners will give you the best legal advice according to your country of residence, profile and budget, so you can safeguard your wealth.
Ensure your legacy now with Mundo. Contact us now!
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