You would go international whenever you question whether your domestic plan will adequately protect you. An instance would be when a present creditor might ignore the charging order remedy and attempt to set aside an asset transfer to a domestic limited partnership, LLC or domestic trust. It’s poor planning if your creditor can argue that your transfer was fraudulent. You are then safer with transfers to a Nevis LLC because Nevis expressly deems these transfers not fraudulent. In this respect, a properly structured Nevis LLC is more protective than the international trust – particularly when you already have creditors. Transfers to the trust could be a fraudulent conveyance and contestable in the trust’s jurisdiction, although practical obstacles may still prevent creditor recovery. This deserves repeating. If a Nevis LLC member has an existing creditor, Nevis LLC laws allow the member to transfer his or her assets to the LLC without it beinga fraudulent conveyance if the debtor-member’s interest is proportionate to his share of the contributed capital. This transfer is considered a fair value exchange and not fraudulent. Interestingly, a promise of a future investment in the Nevis LLC by a present or incoming LLC member can be used to measure this proportionality. A debtor-member can then own a minority interest, subject to the charging order, though the debtor-member contributed all or most of the LLC’s present assets – provided the majority member contractually promised to pay its larger proportional share later. This dilution strategy can effectively discourage creditors whose charging order recourse is then only against only a small minority interest in the LLC. This feature is unique to the Nevis LLC. It’s only one example of how we can achieve safer results internationally.
