In litigation, flexibility is the key to winning. No litigator wants to go into the courtroom with only one argument. Prosecutors go for multiple ‘lesser included charges’ just to make sure they leave with a conviction. Defense attorneys prepare as many defenses as possible, even though just one winning argument is enough. By far the most significant and important ‘cost’ of beginning a fully foreign asset protection trust is the loss of your flexibility.
Your execution needs to be tactical, but your planning must be strategic. If you move from strategic to tactical too soon, you may not be able to extract yourself. There is no place where this is more accurate then when talking about optics.
“Optics” is the word litigators use to describe how a case “looks” to a judge or jury. If a case has good optics, it means it feels right. Arguments go over better and your chances of winning go way up. Bad optics means it doesn’t pass the smell test, and bad optics can be the kiss of death for a judge or jury. Even more importantly, bad optics put you at a severe disadvantage when negotiating.
For better or worse, nowadays, ‘offshore’ conjures bad optics. This is truer today than ever before as illegitimate uses of offshore, like hidden accounts with stolen money and tax evasion, continue to make headlines.
Martin had been a client for over 7 years. He became involved in a civil issue over a transaction he had been a party to. We had been waiting to trigger his trust until it became apparent that it was going to be really necessary. In other words, until it gave us a tactical advantage.
One day he called me to tell me that his civil case had been upgraded to include criminal charges – all of the sudden the optics became critical.
We had a conference call with his criminal attorney and the one thing he insisted we cannot do is trigger the trust and move the assets offshore. For him this would create such bad optics that he felt he would not be able to keep Martin from serving time.
Because we had the Bridge Trust® in place, and had been strategic about not triggering it too early, we were able to make that tactical decision in real time to keep the trust, the trustee and the assets in the U.S. Therefore, we didn’t have to disclose any offshore accounts or jurisdictions to the prosecutor, the court, or the attorneys, because there were none!
Martin went on to both plead out the criminal charges with no jail time (because we had good optics) and still use the existence of the asset protection planning to successfully settle the civil issues on very favorable terms to him.
Had Martin had a fully foreign asset protection trust in place he would have be stuck. He would have had no choice but to disclose and the optics would have been destroyed because he would have really looked like the bad guy they had painted him to be (and which he really wasn’t).
The point is obvious, a foreign trust is not always a tactical advantage. What you want is the option to have a fully foreign trust – not the obligation. This huge flexibility advantage alone is enough for me to consider the Bridge Trust® a superior plan than a commitment to a fully foreign asset protection trust from day one.
How can the Bridge Trust® be better than a fully foreign asset protection trust? For the same reason that a single strand of spider silk can be stronger than steel – FLEXIBILITY!
For more information, download the “5 Reasons Why the Bridge Trust® is better than a Foreign Asset Protection Trust.”