Asset Protection Strategies For Real Estate Investors

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A common way of investing, is buying real estate. But like with any other asset, it can be grabbed by someone else after a lawsuit. That is of course something you don’t want, it’s a very undesirable experience. Especially after all the hard work you have put into acquiring everything.

What I will go through, is how to protect property using offshore strategies. In some countries you do have additional domestic asset protection strategies for real estate investors, which can also be combined with offshore. But to make everything simple, I will explain the international part of protecting this kind of asset.

Asset Protection Strategies For Real Estate Investors - Infographic

The way I would suggest protecting real estate, if it’s a condo, a house, land etc. is by forming an offshore trust, which owns an LLC that is also foreign.

That LLC can then own a domestic company, where the property is located, and the domestic entity can own your property. Once the structure I’ve just described is completed, the ownership of that asset is protected.

It’s important to keep in mind, you should use one domestic entity for each piece of real estate. That way if you are exposed to some kind of claim like a slip and fall, which happened in let’s say a house you own, all of your other properties will be protected from the liability of any one non related incident.

You can do what I’ve described in an even more advanced way, but what is possible for you to do, in the end comes down to where your real estate is located. Various countries have different laws, which is why it’s not a good idea to use any one size fits all service, the end solution must be customized. Using some cheap service that isn’t tailor fit for your needs, is unlikely to help and might even hurt you.

What you can never do, is of course defraud your creditors. Meaning you can’t just take out a mortgage, buy a house, protect it with a trust, and then declare bankruptcy, and hope your loan will go away. The portion of your house that will be protected, is what you have already paid down.

It’s also important to consider, there are always limitations when protecting immovable property. The real estate you own is always subject to local laws, compared to currency in a bank account, which can be moved at any time to a different country.

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Fredrik helps high net worth individuals with creating international asset protection strategies. To keep anything from currency, real estate, precious metals and any other kind of investment protected from an unexpected lawsuit.