The offshore asset protection trust (OAPT) is typically perceived as a “Grishamesque” invention habitually used to lock away billions of dollars on palm-fringed shores, far away from tax authorities and creditors. The practical reality is far less sensational and trusts established under the laws of leading international financial centers such as the British Virgin Islands (BVI) and the Cayman Islands are routinely used as sophisticated but entirely legitimate wealth management, estate planning and diversification tools.
As stakeholders vie for market position on the international stage, the question of whether OAPTs are becoming redundant in favor of U.S. domestic asset protection trusts (DAPTs) which provide similar (if not identical) levels of utility in legitimate wealth management and planning strategies, comes to the fore. But how do the OAPT and DAPT compare from a vulnerability perspective when creditors seek to monetize their arbitral awards and judgments from the assets of such trusts?
