In 2023, the American economy is in big trouble because of too much debt, which is causing a major recession. This kind of crisis usually leads to more unnecessary lawsuits, like it happened in 2008. Even with that, the United States is still a top choice for investing money.
Every year, many High Net Worth Individuals (HNWIs) move to the United States. According to experts from reliable research organizations, like Henley & Partners and New World Wealth, a lot of millionaires have already moved or plan to come to the United States soon despite the financial risks they may encounter.
This situation raises an important question, that is how can people protect their money during a crisis without leaving the country? New immigrants who don’t know much about the American legal system may not realize that they may be held responsible even if they don’t do anything wrong. Unfortunately, such new immigrants usually only find out about this when they experience legal issues. By then, it might be too late to protect their money effectively.
That’s why it’s a good idea to look for other ways to keep your money safe in the United States if you can’t use offshore haven options to store it abroad.
US states that allow you to establish DAPTs
A Domestic Asset Protection Trust (DAPT) is different from traditional trusts because it lets the owner both set up the trust and receive its benefits without involving another person. Without a shadow of a doubt, it is a great asset protection tool in general and the best type of trust to protect assets in the USA.
A DAPT helps people achieve different financial goals:
- protecting assets during tough times like divorce, creditor claims, or legal problems
- keeping personal wealth safe from lawsuits or accusations of misconduct in positions of power
- making your own will that isn’t limited or influenced by strict legal regulations
- safeguarding personal and business assets
- staying in control of assets even if they are separated on paper, while still enjoying the benefits of asset ownership
- keeping ownership of specific assets hidden from any third persons
- making the DAPT a separate entity for tax purposes or taking care of taxes independently.
Here are the US domestic protection trust states where you may establish a domestic asset protection trust. All in all, 18 states out of 50 allow it:
- Alaska
- Colorado
- Delaware
- Hawaii
- Michigan
- Mississippi
- Missouri
- Nevada
- New Hampshire
- Ohio
- Oklahoma
- Rhode Island
- North Dakota
- Tennessee
- Utah
- Virginia
- West Virginia
- Wyoming.
You don’t have to live in any of these states to establish a DAPT. It’s enough to have a trustee in the state for the above purpose.
US states with the best conditions for online businesses
Tax requirements vary greatly depending on the region within the United States where a company operates. If you can do your work remotely with no need for a specific location, it’s a good idea to take advantage of this and register your business in the most beneficial area. This is especially important for entrepreneurs who have the means to run their businesses from anywhere in the world, even outside the United States.
Regardless of where in the world they live, American citizens must pay taxes to their home country. If it’s not possible to change your tax residency following European rules, you can still benefit from changing the location where your business is registered within the United States.
Here are some states that stand out in different aspects of business establishment and operation:
- Registration fees for LLCs: Kentucky and Wyoming have the lowest fees of USD 40 and USD 100, respectively, compared to the majority of states that charge USD 500.
- Filing annual reports and LLC renewal fees: New Mexico and Arizona do not require any fees for these processes, while Wyoming charges USD 60 per year.
- Anonymity of founders: Delaware, Wyoming, New Mexico, and Nevada allow LLC owners to keep their personal information private in publicly available documents. This safeguard shields owners from unwanted attention.
- Taxation: Wyoming and South Dakota offer the most favorable conditions. These states do not impose state income tax, personal income tax, property tax, gross receipts tax, or franchise tax. The sales tax rate is around 5% to 6%.
- Limited personal liability for business debts: Nevada, Delaware, and Wyoming provide protection where creditors cannot force owners to sell company assets to settle debts. Repayment is only made from future earnings.
- Cryptocurrency-friendly regulations: Wyoming has the most accommodating laws for conducting business with cryptocurrencies.
Choosing the right state is crucial for a successful start to your business in the United States. The International Wealth team of experts has developed an excellent plan for opening a company and bank account in Delaware, which is one of the suitable states. Please feel free to contact us for professional guidance and support!
US states with challenging procedures for lawsuit filing and litigation
With more lawsuits than in other countries, legal disputes are common in the United States. This is why asset and capital owners look for places where it’s harder to bring a claim.
Out of all US states, Nevada is at the forefront of protecting assets from legal disputes because of its unique asset protection laws:
- Equal treatment of claimants: In the U.S. legal system, Exception Creditors can bypass asset protection structures. However, in Nevada, assets held in a trust are protected from any claims.
- Short statute of limitations: Nevada has the shortest timeframe to file a lawsuit, only 2 years after the incident or crime, while other states allow 4 to 5 years.
- Favorable tax conditions: Nevada does not impose income tax on gifts, property transfers, real estate, or inheritance. These tax advantages facilitate effective tax planning and reduce tax liabilities.
- Stringent evidence requirements: Plaintiffs in Nevada must provide compelling and well-founded evidence to support their case, making it more challenging to bring accusations compared to other states.
While Nevada offers great advantages for defendants, offshore trusts in places like Nevis provide even better financial protection opportunities. If you want to shield your assets from risks, no matter where you are, email your request to International Wealth consultants and they will help you explore the best options.
US states with enhanced protection for homeowners’ rights
Owning property in the United States comes with added responsibilities. However, some states have special laws called homestead exemptions that provide benefits for residential properties and their land. Here’s what these laws offer:
- partial or complete exemption from property taxes
- protection of primary homes from creditors if the owner declares bankruptcy, so they don’t lose their home during financial difficulties (mortgage loans still need to be repaid)
- unconditional housing rights for surviving spouses in a couple.
The states with the most favorable homestead exemption conditions are Nevada, Texas, Florida, Iowa, South Dakota, Kansas, and Oklahoma. The other US states also offer some level of tax relief for homeowners, although it may be limited.
These benefits are just a few examples of how property is protected in the United States. Each state has its own rules regulating property rights and obligations, designed to meet the specific needs and priorities of property owners.
Keeping assets in other countries may seem easier, safer, and cheaper. It doesn’t promise any financial or legal storms. Yet, this advice doesn’t work for everyone. There are more than 5 million wealthy individuals in the United States, and each person has their own idea of financial security. There’s no one-size-fits-all solution.
Some people prefer to keep a share of their assets nearby for convenience.
Remember that you must report offshore assets to tax authorities. Moving your assets to another country doesn’t mean you can hide them. If you don’t follow the rules, you may face fines and closer scrutiny from US government agencies.
In conclusion, many rich people find it simpler to keep their valuable assets in the United States rather than move them abroad. The important thing is to consult a lawyer to choose the best place to live in or relocate your assets to.
