Asset protection is the structuring of assets such that those assets become legally unreachable to claimants and creditors. Sound asset protection does neither encourage nor necessitate illegal acts such as perjury or concealment of assets in violation of law.
One of the soundest instruments for international asset protection are insurance products from Switzerland.
This is because of powerful provisions in the Swiss insurance law. Where else but in Switzerland could one find the ideal vehicle for protecting assets?
In Swiss law, annuity and life insurance policies are fully protected and cannot be included in any bankruptcy procedure or seized by any creditors. Even if a foreign court should specifically order the seizure of a Swiss annuity account or its inclusion in a bankruptcy estate, the insurance policy will not be seized by the Swiss authorities, provided that it has been structured the right way.
There are, essentially, three requirements:
- A person who buys a Swiss life insurance policy must designate as beneficiaries his or her spouse or descendants, or a third party (if done so irrevocably). If the policyholder has designated his spouse or his children as beneficiaries of the insurance policy, the policy is protected regardless of whether the designation is revocable or irrevocable.
- To avoid suspicion of making a fraudulent conveyance, the person must have purchased the policy or designated the beneficiaries not less than one year (in some cases five years) before any bankruptcy decree or collection proceedings are initiated.
- The insurance policy is deposited in Switzerland.
A properly structured Swiss insurance policy is a viable and sound alternative to offshore trusts.
In fact, Swiss insurance policies are probably the soundest, smartest and most economical asset protection and estate planning facility in the world, providing you with the strength, security and reliability of the Swiss legal system.
While the basis of a trust is the transfer of ownership to a trustee, a holder of a Swiss insurance policy is the owner and retains full control so long as he or she remains solvent. This also means the owner can liquidate their investment at any time.
A properly arranged Swiss insurance policy provides many benefits without the costs and drawbacks of dealing with more complicated structures.
Benefit | Swiss Insurance Policy | Asset Protection/Offshore Trust |
Privacy | Yes | Yes |
Foreign jurisdiction | Yes | Only if trust assets are not invested locally |
Liquidity | Yes | Depending on the investment decisions of the trustee |
Tax-free locally | Yes | Variable |
Owner retains full control | Yes | No |
Established legal principles | Yes | Variable |
Legal insurance included | Yes | No |
Simple and inexpensive | Yes | No |