Asher Rubinstein, a partner at Gallet Dreyer & Berkey and an asset protection, tax and trusts and estates attorney, has been advising clients on legal offshore asset protection for more than 20 years. He talks about why some families are considering moving assets offshore in this moment of political and economic uncertainty:
What does it mean to move assets offshore, and why do families do it?
Moving assets offshore is not simply saying, ‘I want to invest in Japanese yen’ or ‘I want to buy an EFT that’s offered out of London’ that the family office does in its own name. This is setting up a new entity offshore, whether it’s a trust or a foundation. It’s distinct from the U.S. family, who is still here. It’s a legal entity in a foreign country that invests on its own. Family members are the beneficiaries.
Historically, there were two reasons to go offshore: one was asset protection, and the second was to hide money from the tax authorities. Today, going offshore to hide money from the IRS is next to impossible — I would never advise clients to go offshore for that reason. But asset protection is still a valid reason.
Why are you seeing families interested in this now?
Interest in offshore asset protection is cyclical — it comes and goes depending on the political and economic climate.
But since Trump came to office, particularly with the economic chaos that has ensued with tariffs, more than ever in my three decades of doing this, people are really starting to get scared. They’re scared of currency controls, of governmental expropriation of assets, of economic turbulence — and they’re scared of war. They want to put some money in a stable, secure offshore jurisdiction to know that it’s there.
How do families decide where to move their money?
You want a country with a track record of economic, political and social stability and that has large, well-established banks that have billions under management. You also want a well-developed judicial system and rule of law, with well-developed government regulation of banks and trust companies and other service providers. These jurisdictions also have impediments that make it difficult for a U.S. creditor to bring a lawsuit to penetrate the trust or foundation that we have set up.
What are the pitfalls of moving assets offshore?
People used to go offshore for tax avoidance. You can do this to protect the assets from civil creditors or governmental expropriation, but you don’t want to run afoul of the IRS. You can’t in this day and age consider your offshore assets to be secret. This has to be done with complete transparency to the IRS.
Sometimes clients come to me and say, ‘I’m involved in litigation — can you help me protect my assets?’ We would have to have a discussion about fraudulent conveyance and doing something after you have been sued versus doing something ahead of time, which is much better.
Another thing for people to understand is they really no longer control the assets once they’re offshore. They have removed the assets to a foreign jurisdiction that doesn’t recognize U.S. court judgements. If you had the ability to bring those assets back at will, a judge could order you to bring them back. The clients need to be comfortable with the fact that the assets are there for their benefit, but they can’t control them.
It’s true that under some circumstances, you can bring the money back. You can collapse the structure and request a final distribution as a beneficiary, and the trustees will comply. However, if you are not willingly asking for the money back, the trustee is in control of the assets and will not abide by the request. That’s how the asset protection is effective.
What issues do you discuss with families who are considering this?
One question is whether the government will come after me if I sent money offshore. The answer is no, provided you’re not under restraint. For example, you can’t send $5 million to a foreign trustee when you have just been served with divorce papers.
The U.S. always allows families to send money offshore. There are many reasons to have an offshore presence — for example, you own property in another country and set up a bank account to pay your utility bills. You may have to report it, but it’s not illegal.
We also talk with clients about family dynamics: Who is going to benefit from the assets that are moved offshore? Is it the client, their children, their grandchildren? Is this a dynastic trust that’s going to last for generations? What are the assets we’re going to put offshore? I’ve moved art offshore, I’ve moved digital assets offshore. But U.S. real estate assets, for example, can’t be moved. If the asset remains in the U.S., it’s subject to U.S. court jurisdiction and governmental confiscation.
