Listen for a second. Are the Cayman Islands calling your name?
(Not for a visit, although I hear they're really quite lovely.) No, the tiny Caribbean nation wants your hard-earned dollars. And if you're in the business of cyberporn, you'd be smart to lend it an ear.
The Caymans - along with Bermuda, the Bahamas and a few other far-off places - have become the world's top spots for what's politely known as "asset protection." In other words, keeping other people's cotton-pickin' hands off your money.
If you do things right - this is key - you might be able to keep your hard-earned dollars to yourself, even if trouble comes in the form of a subpoena or a letter from the IRS.
Here's a look at frequently asked questions about offshore accounts. The usual caveats apply: I'm not a financial adviser or an attorney. Consult someone who is one or the other (or both) before you do anything.
Q: Why would I want to send my money to some country I've barely even heard of?
A: Because the money would be in another country, and it would not be subject to American laws - or American lawyers. If someone successfully sues you in the U.S., a judge can't easily order an offshore bank to cough up all of your dough. (It can do that to a bank with branches in the U.S., even if it's owned elsewhere.)
Even if you're not being sued, strict privacy laws in offshore havens will help you keep a lid on your financial status. It may be much more difficult for lawyers or the U.S. government to go poking around in your accounts, figuring out how much you're worth (and whether you're worth suing).
"Offshore trusts offer unparalleled confidentiality, increased protection from the perils of civil litigation and liability and even from such things as divorce or business dissolutions," said Offshore Co., which provides assistance with - you guessed it - offshore accounts.
Q: Aren't offshore accounts illegal? Will I get busted for having one?
A: It depends on what you use it for. There's a difference between using a trust to discreetly hold money and using one to hide money.
According to the Asset Protection Law Center, it's very difficult for judges to force a defendant to forfeit money in a foreign trust. However, according to the law center, "the result may be different when the offshore trust is used as a scheme to defraud creditors or the IRS, or to protect the proceeds of criminal or fraudulent activities. ... The offshore trust is not designed to allow individuals to defraud others or engage in tax evasion or criminal conduct."
Q: So if I do something illegal, a judge can take the money out of my offshore account? What's the point then?
A: Were you thinking of violating the law? Naughty, naughty! The point of an offshore trust isn't to let you go wild. (Leave that to the girls in those videos they advertise on late-night TV.)
Instead, offshore trusts allow you to place a kind of veil over your financial information and your money. Lawyers, the IRS and your former business partners may be able to pierce that veil if they're motivated and savvy enough. But they might not be willing to take the time and effort - or, for that matter, spend the money.
Q: How do I start an offshore trust?
A: Talk to your accountant. You may be surprised how much ordinary financial advisers know about this kind of thing. Not too long ago, I asked my own accountant about protecting money in a trust, and I was shocked to hear him start reeling off the names of island nations where I could stash my cash. Even this guy in a run-down office by the beach knew the score.
You also can find a lot of companies online that will help you open up an offshore trust.
Do some research before you hire a company. This is your money, after all, and you don't want your adviser to be a crook or an idiot.
First, figure out where the company is located. (If that information isn't on their website, run.) Then, visit the website of the company's local Better Business Bureau chapter. See if the company is a member and if any complaints have been filed against it.
You also might want to search for the company's name on Google to see whether it's gotten in hot water. And you might want to visit your local library and ask about accessing a database of newspaper articles. Search for the firm's name there, too - along with the names of its major players - and see if there are any skeletons in any closets.
Q: If I send my money to some island paradise, should I take a trip to go visit it?
A: Absolutely. Bring me along, won't you?
This article originally appeared in the August 2008 edition of AVN Online magazine. To subscribe, visit AVN Media Network.
