What is a foreign asset protection trust?

A foreign asset protection trust (FAPT) is a trust that is established in a foreign country outside of Washington for the purpose of protecting assets from lawsuits and creditors. The trust holds assets that are owned by the trustor, usually in the form of cash, investment portfolios, real estate, or other assets. The trust is managed by a trustee, usually a bank or other financial institution, located in the foreign jurisdiction. The trustor retains control over their assets in the trust, but is protected from any lawsuits or creditors in Washington. FAPTs are often used in the context of estate planning, as they offer much greater asset protection than traditional wills and trusts. They also provide protection from creditors in the event of a lawsuit. Because the trust is located outside of Washington, the laws that apply in Washington may not apply to the trust. This means that creditors or litigants may not be able to access the assets held in the trust, providing the trustor with greater protection. FAPTs are also beneficial in terms of asset diversification. They can be used to hold assets in multiple jurisdictions, allowing the trustor to spread the risk of asset losses across a variety of different countries. This can be beneficial in times of economic crisis, as the trustor can be protected from losses incurred in any one jurisdiction. In conclusion, a foreign asset protection trust is a trust that is established outside of Washington for the purpose of protecting assets from creditors and lawsuits. It offers asset diversification and provides much greater asset protection than traditional wills and trusts.

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What is a foreign asset protection trust?

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