Three Perils and Three Protections for EB-5 Investor’s Assets

A foreign investor’s decision to apply for an EB-5 visa invites a substantial amount of uncertainty.  Indeed, the program requires that the investment capital be at risk with no guarantee of return.  Beyond the investment capital, many investors are sometimes surprised to learn that they have unprotected assets while they and/or their families live in the U.S. before, during, or after EB-5 program participation.  These assets could be vulnerable to many threats, including litigation, creditors, and probate courts.  There are strategic and legal protections that EB-5 investors can take to avoid a loss of assets.  In this article, we discuss three ways to protect your assets.

If you or anyone in your family lives in the U.S., your family could be involved in litigation, creditor actions, or cases involving the probate courts.  For example, you may own property that your family lives in, or your child may attend a university in the U.S.  If an accident occurs on your property, or your child or spouse is involved in a car accident, you may become involved in litigation, often resulting in damages sought by the plaintiff and the plaintiff’s creditors.  Without the proper protections, your U.S.-based assets, including any property or bank accounts, could be used to satisfy the debts owed.  

1) Protection Trusts in the U.S.

One effective shield for these possibly costly accidents is the creation of an asset protection trust, where a legally created entity protects the EB-5 investor’s assets.  One individual or institution would be the grantor, another the trustee, and the third person would be the beneficiary.  So, for instance, if a child were studying in the U.S., one parent was in the U.S. with the child, and the other parent was in his home country, each could fulfill a role in the trust to enable its creation.  If litigation or creditor actions arose, the assets in the trust could not be touched.

2) Foreign Protection Trusts

Another protective measure is the establishment of a foreign offshore asset protection trust.  This would be a particularly effective protective measure if the EB-5 investor’s entire family lived in the U.S.  Many creditors find that pursuing litigation in foreign jurisdictions to collect from offshore accounts to be very difficult.  Moreover, even those that try will face very high standards of proof before being able to collect from those offshore assets.

3) Revocable Living Trusts

Finally, if assets are in the name of a family member and that family member dies, those assets could end up in a probate court.  Probate courts handle matters of an individual who dies without a will and testament (a “revocable living trust”).  The probate courts are slow and expensive, and it can sometimes take surviving relatives years to finally take control of the deceased family member’s assets.  EB-5 investors can avoid the probate court system entirely by properly creating a revocable living trust that carry out the EB-5 investor’s wishes after their death, rather than letting a probate court decide.

There are common threats to your assets while living in the United States.  You can protect yourself, though, through cautious planning.  The creations of both domestic and foreign asset protection trusts, and the drafting of a revocable living trust, are a few options for guarding your assets.  

At the Law Offices of Vaughan de Kirby, we know how important it is for you and your family to be fully prepared before, during, and after you obtain an EB-5 visa.  If you need a referral to a skilled estate planning expert who has worked with many EB-5 investors, we can help. Our San Francisco EB-5 immigration attorneys can refer you to a skilled estate planner, as well advise you about the requirements of an EB-5 visa.  Call us today at 415-221-2345 for more information.

Vaughan de Kirby
California Immigration Attorney

EB-5 Regional Center Program Ends 12/08/17

Congress has extended the current Regional Center program to December 8th, 2017, at which time it will sunset unless extended. We anticipate future legislation that will call for an increased investment amount and more stringent requirements. For this reason, we recommend to our clients that they take action under the current law if at all possible.

Contact Us Now
00:00:00

Free Books

<span>EB-5 Due Diligence Workbook:</span> Ten Critical Steps to An Informed Decision

EB-5 Due Diligence Workbook: Ten Critical Steps to An Informed Decision

Vaughan de Kirby's book, EB-5 Due Diligence Workbook: Ten Critical Steps to An Informed Decision was written for EB-5 investors who are selecting a regional center.

Learn More +
<span>Complete Guide To The EB-5 Green Card:</span> Critical Knowledge For Investors Who Want To Make The Best Decisions For Themselves And Their Families

Complete Guide To The EB-5 Green Card: Critical Knowledge For Investors Who Want To Make The Best Decisions For Themselves And Their Families

If you are seeking permanent residence status in the U.S., request a free copy of Complete Guide To The EB-5 Green Card to learn about the EB-5 visa program.

Learn More +
View All Offers