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5 Asset Preservation Strategies for HNW Individuals

    High net worth individuals who accumulate wealth are always at the risk of probable creditors. It is a good idea to set out an arrangement to protect your precious assets - either business or personal, in a way that you and your assets are fully protected even in the event of a lawsuit being filed. 

    The assets preservation strategies that you employ to protect your assets is not any clandestine attempt to hide them but a legal arrangement to defend your hard earned assets against anyone bringing a lawsuit. With these strategies, you are still in control of your assets and can enjoy their economic benefits although you are not legally entitled to them.

    Learn how to calculate your net worth

    Asset preservation strategies are plotted to safeguard you from the risk of imminent danger in form of creditors. Few such strategies are:

    1. Establish Limited Partnerships and Offshore Companies


    One of the best assets preservation strategies is establishing your legal entities as limited partnerships, corporations, LLC’s (limited liability companies) and offshore companies to operate your business interests, you can protect your valuable assets from both - the personal creditors and the business liabilities.

    A family limited partnership can be utilized for defending your bank accounts, brokerage accounts, and other similar financial records. An LLC can protect your assets like boats, real estate, planes, intellectual property, running businesses and so on.

    2. Business Trusts

    Since long times, it is customary for wealthy folks to install trusts to preserve their assets. This has been happening since generations and some frequently used trusteeships are: support trusts, blend trusts, spendthrift trusts, personal trusts, self-settled trusts, discretionary trusts and so on.

    Each trust is different and has its plus and minus points. But the intention in using the trust should be just that the trust must be unalterable and should remain as the sole owner of the transmitted property.

    Hence to preserve the unalterable trusteeship, you may appoint a co-trustee who is a family member or a reliable friend who is worthy of your faith. Using personal interest foundations is another alternative to secure your assets through trusts.

    3. Set Up Offshore Private Foundations and Trusts

    Although setting up of offshore legal entities like private foundations and trusts is more expensive than setting up of their domestic counterparts, but they prove to be more helpful in protecting your assets.

    Being governed by laws of the foreign shores these entities can be operated in a straightforward manner in terms of documentation and financial reporting.  Anyone from your home country wanting to enforce a financial lawsuit against you in the overseas will find it cumbersome. Even when you set up your offshore entities quite late, you are well protected by the foreign ground laws.

    4. Prenuptial Agreement

    Having a prenuptial agreement is another way to protect your assets as the creditors of your spouse cannot challenge the agreement so easily. Moreover, by having such a legal transfer, you are protecting both the spouses from each other's creditors.

    5. Transmutation Agreement

    A simple written agreement like the ‘transmutation agreement’ will safeguard the property interests of both the spouses. As each spouse has one’s own separate property no spouse can challenge each other in a fake property transfer tiff.

    Thus it is beneficial to take steps for assets preservation strategies well in time before any real crisis surfaces especially before you sign any personal guarantee. An appointment with a good asset preservation consultant will do you a world of good!

    Although tiny, nations like St. Kitts and Nevis and Dominica are tax and asset preservation paradise as their citizenship by investment programs offer many benefits.


    Enjoy these benefits through obtaining your dual citizenship and passport!


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    Vicky Katsarova

    A citizen of the world in every sense of the phrase, Vicky has done her fair share of traveling. Born and raised in Bulgaria, she spent 10 years living and working in Abu Dhabi before settling down with her family in Nova Scotia, Canada. And it’s only fitting for the CEO and founder of High Net Worth Immigration to be an avid globetrotter—her extensive travels have given her deeper insight and understanding into her clients’ needs.

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