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Swiss Bank Account – Maximum Asset Protection
How do I protect my Swiss bank account from being seized in a lawsuit?
Our experience has shown that the strongest legal tool for the purpose of asset protection for a Swiss bank account is the Cook Islands trust. The Cook Islands are due south of Hawaii.
Here is a simplified version of how the Cook Islands trust can protect your Swiss bank account.
- You are sued and a money judgment is granted. You are ordered to pay money to the one who sued you (now referred to as your “judgment creditor”).
- You are taken into deposition and the opposing attorney asks you, under oath, to expose all of your assets. (You are now referred to as the “judgment debtor.”)
- The only substantial remaining asset is your beneficial interest in a Cook Island trust, which owns your Swiss bank account.
- The judge orders you to take the money out of the trust and pay it to your judgment creditor.
- You write a letter to the trustee telling them of the judge’s order.
- Because a “duress clause” has been placed in your trust and you are now under legal duress, or pressure, the licensed, bonded trustee will refuse to comply with the judge’s commands. The trustee will not release your Swiss bank account to the courts. Your money will remain safe.
- Because the judge in your country does not have jurisdiction over the trustee in the Cook Islands, the money in your Swiss bank account remains secure and beyond the reach of creditors.
- The judge cannot find you in contempt of court because you are in a position where it is impossible for you to comply with the judge’s orders.
This arrangement puts you in a position of strength. What will often happen is that the judgment creditor settles the case for pennies on the dollar. If the creditor does not settle, your Swiss bank account will simply remain unreachable by your creditor(s). The trustee can pay bills for you or can pay money to alternate beneficiaries, such as family members, who can take care of your needed expenditures.
There was one case (the “Anderson Case”) where the attorney who prepared the trust made the grave mistake of naming the trust “protectors” the same people as the beneficiaries of the trust. The trust protectors can give limited instructions to the trustee. The court ruled that since the judgment debtors (who were both the beneficiaries of the trust and the trust protectors) had the right to instruct the trustee, and then removed themselves as protector too late in the game, they were held in contempt. They were only held a short while, however. Even though the trust was established in an erroneous manner, the assets remained safe and sound inside of the trust. The judgment creditor, in this case the US government, was not able to touch the assets.
How do I know my Swiss bank account will be safe inside the trust?
Adding one more legal tool to the mix gives clients a great degree of added comfort. A limited liability company (LLC) established in the Caribbean island of Nevis can be established to own the Swiss bank account. Your Cook Islands trust will own 100% of your Nevis LLC. You are the manager of the Nevis LLC. As manager you can have 100% control and 0% ownership. That is, your trust owns the entire company but you have the management string of control in your hands.
This arrangement gives you the benefit of being in 100% control of your Swiss bank account and oversight of the day-to-day activities of your account. When the “bad thing” happens, the trustee is duty-bound to temporarily remove you as manager until the legal duress subsides. When the “bad thing” goes away, you are restored as manager.
The benefit here is that by merely changing the manager from you to the trustee there is no “fraudulent transfer” or “fraudulent conveyance” argument that would reasonably hold water in a court of law. You are not transferring assets. You are simply changing the management temporarily.
Fraudulent transfer is where a current or potential judgment debtor transfers his or her assets beyond the reach of creditors. “The Statute of Elizabeth” created the first fraudulent conveyance law in 1571. This principle was adopted by most countries which inherited English law, including the United States.
A sample fraudulent transfer scenario is where a man crashes his car into the back of another vehicle. Knowing he is liable, he gives all of his money to his mother thinking that this will protect his funds from seizure. When he is sued and receives a judgment for more than his insurance will cover, the courts will reverse the transfer to mother and allow the courts to have access to the fraudulently transferred funds.
Coming back to the Nevis LLC, this fascinating legal tool gives you 100% control, as the manger of the LLC; and your Cook Island trust has 100% of the ownership. Again, your Swiss bank account will be held inside of your Nevis LLC.
Cook Island Trust –> Owns 100% of Nevis LLC –> Owns Swiss bank account.
The reputable, experienced, licensed, bonded trust company in the Cook Islands is your trustee. You are the manager of the Nevis LLC and the signer on your Swiss bank account.
Can I trust the trustee?
This is answered best with a question. Would you rather have a 100% chance of your money being taken by your legal enemy? Or would you rather have a licensed, bonded trustee protecting your money from your legal enemy? Keep in mind that the trustee only steps in as manager of your Nevis LLC when your money would have a near 100% chance of being taken by the courts. Moreover, the bonding company protects your funds up to $5 million US.
When should I establish my Cook Islands trust and Nevis LLC for my Swiss bank account?
There is a one to two year statute of limitations on fraudulent transfer in the Cook Islands. What this means is that by the time you fight the case in a court of law, file an appeal or file bankruptcy, enough time will have passed that even if it is proven that you placed funds your Swiss bank account into the trust with the sole intent to defraud your creditors, your money will still remain safe.
So, the clock is ticking. If maximum asset protection for your hard-earned money is important to you, the sooner you place your Swiss bank account inside of your Cook Island trust the better.
To establish a Swiss bank account owned by a Nevis LLC and Cook Island trust or for more free information, call Companies Incorporated at 1-800-830-1055 or +1-661-253-3303. To apply online, please click here. To order an offshore company plus account, please click here.
FREE Consultations on offshore business formation, and asset protection from lawsuits.
I learned a lot about how exposed I was to lawsuits and judgements, I protected my wealth with several instruments.
- J.P. Dumini
I’ve learned that nobody wins in a lawsuit, the only way to ensure that you don’t lose, is to have something in place when you need it.
- J.M. Ansen, Los Angeles