Establishing an Offshore Life Insurance Policy
Many investors continue to look for investment opportunities throughout the worldwide marketplace. The common themes include evaluating investment options for asset and currency diversification that are not available from domestic investment firms. As many investors continue to face the burdens of additional taxation on their worldwide investment options, there is an opportunity to defer taxation through the unique benefits of a compliant offshore life insurance policy. Instead of the normal cash payments that are standard in domestic policies as premium payments, the offshore life insurance policy allows an individual to contribute assets as premium. Some premium examples would include contributing hedge funds, collectibles, hard assets, shares of a private placement, real estate, etc. There are specific rules as to the number of investment classes to be compliant and should be reviewed by a professional. The cash value asset accumulation/growth and distributions (through loans) along with death benefit can be structured on a tax advantageous basis (tax-free). The ownership structure of a policy is normally an asset protection trust, which will eliminate estate tax liabilities. You will be able to ensure your family is cared for in the way you always imagined through asset protection in an offshore life insurance policy.
Life Insurance policy combined with an Offshore Asset Protection Trust
An offshore asset protection trust is considered by many experts to be the strongest asset protection vehicle when established in the proper jurisdiction. Assets are conveyed to the offshore trusts. You designate the trustees, settlors and beneficiaries. Many individuals considering an offshore life insurance policy will establish an offshore trust. The policy premiums will be paid from the trust along with the trust being the owner of the policy. By having the policy owned by the trust, it will provide additional asset protection and estate tax planning benefits.
How to Obtain Offshore Life Insurance
Obtaining an offshore policy is not that difficult but will require 6-8 weeks for the entire implementation process. All conversations, illustrations, medical exams will occur offshore. The life insurance policy may be purchased by the trust on your behalf. The trust will be created with the intent to distribute the assets to the named beneficiaries. The appointed trustee and investment manager will be able to provide the trust with any asset deemed acceptable by the trust. The assets will then be re-titled into the name of the insurance company as premium paid. The future death benefit proceeds will be paid to the trust tax-free and will be received by your chosen beneficiaries.
Establishing an offshore asset protection trust is just an option not a requirement; however, you must be certain to follow all US laws in the process and work with a trusted legal advisor. The combination of an asset protection trust and an offshore policy will help to reduce taxable investment gains along with tax free death benefits to ensure your family with additional financial security.
