The second component of most asset protection plans is a Limited Liability Company (LLC). This is the best way to keep you in control while providing excellent protection when you have an offshore trust.
An LLC includes a combination of characteristics you would find in a partnership and a corporation. Like a corporation, it protects its members from personal liability for the obligations and debts of the entity through which they are conducting business. But like a partnership, the expenses and income flow directly through to the individual members. Offshore LLCs typically enter into an operating agreement, which states how the members relate to each other and how the company is managed. While the company is liable for its operating debts, the members are NOT liable for any of the LLC’s obligations.
This LLC can be disregarded or passed through for tax purposes, but you can also have it treated as a corporation. You have a great deal of flexibility. Indeed, you can put hundreds of other entities under this LLC, including corporations, which might be controlled foreign corporations, and partnerships. You can include any offshore entity you wish, all owned under this offshore LLC or under your asset protection trust.
This keeps you in control of the assets because when you put the LLC in place, you no longer use the asset protection trust to manage the assets held by the LLC. Assets held by the LLC remain owned by the Asset Protection Trust, but they are controlled by the manager of the LLC (you) until and unless you come under attack. The LLC separates OWNERSHIP, which stays with the trust, from CONTROL, which stays with you.