Offshore Asset Protection Lawyer Explains Cook Islands Trusts ft. Blake Harris | Coffeez

12:55Joe Shalaby:Well, it does involve open a foreign bank account. So the trust typically is registered in the Cook Islands. We have set up trust in other jurisdictions like Nevis and we do business in Belize as well and other offshore jurisdictions beyond those three jurisdictions. But once the trust is registered, we then help clients open a bank account and usually we'll help them open a bank account in Switzerland. So the trust would be registered in the Cook Islands, the safest jurisdiction for an asset protection trust. And then the money would be held in Switzerland, which is the safest place that Americans can routinely open a bank account.

13:26Joe Shalaby:Under the structure, they can invest in stocks, bonds, gold, silver, cryptocurrency. Anything they can invest in themselves, they can invest in through the trust. So we open both the bank account and the trust offshore, and that's where they get the real protection.

13:39Blake Harris:Let me ask you, are there tax benefits to opening an account in Switzerland? I wish.

13:45Joe Shalaby:The trust itself is tax neutral. It does not increase tax liability. It does not decrease. Putting assets in, taking assets out, always tax neutral. Assets can be transferred over in kind. You don't have to liquidate your portfolio. You don't have to realize any gains when you put them into the trust, only if you were to sell them the trust. So it's the same tax implications. Same exact tax implications. It does have to be reported to the IRS and FinCEN, and we give our clients a detailed memorandum on how to complete those reporting requirements.

14:12Blake Harris:and they just hand that to their accountant and their accounts.

14:15Joe Shalaby:CPA, CPA does their magic with the paperwork. Client signs off and it does not increase your chance of an audit either. The IRS sees reporting your offshore trust as an act of compliance and in no way does that raise any red flag or penalize an individual.

14:30Blake Harris:Yeah, because I could see how that's a concern because the IRS is like, well, let me see the rest of. You're already reporting everything that's in that account.

14:37Joe Shalaby:Correct. And the IRS likes to see that you're reporting and likes to see that you're complying And the IRS has plenty of people to go after who aren't even filing their taxes or aren't even paying their taxes. And it's a complex issue for the IRS. And the IRS is very well trained at going after simple matters. But the more complex it is actually, the less likely it is the IRS has the brainpower to go after.

14:58Blake Harris:Now, you know, obviously as a lawyer, every lawyer has to pick their niche. What was that pivotal moment that when you realized that you want to just basically go all in on asset protection?

15:09Joe Shalaby:So I've been an attorney for about 15 years. I've always focused my legal career on trust. It was early in my career. I had done other types of trust, domestic trust, the revocable trust that you mentioned. But it was many years ago after I'd set up an asset protection trust, a client came back to me a few years later and I was talking to them and various family members along the way. the case finally went away. And I got a call from an individual who they hired us several years earlier. And I remember the exact words, Blake, the trust worked exactly as you said it would. We were able to keep all of our money.

15:49Joe Shalaby:They didn't even have to pay a settlement. They were able to keep all of it because of the trust. And when I heard that, I said, you know what, this is the type of feedback I want to hear. I'm not going to do anything for the rest of my career other than go exclusively after setting up offshore trust. And for several years now, we've done nothing but set up offshore trust.

16:08Blake Harris:Now, to that point, I'd like to ask for the best story. Do you have a good story that really comes to mind where you're like, I just saved this guy a billion dollars?

16:16Joe Shalaby:So we had a client who sold a business. We'll say it's a trucking business. He'd spent 20 years building this business up. And then after he sold the business, he got a fee of around$12 million. Put that money into a Cook Islands trust. Many months later, a few months later, the business started tanking. The new owner didn't understand how to operate the business quite as well as my client who'd built the business from scratch. The new owner tried to undo the transaction, sued our client for$12 million. This was going to leave our client in debt because the client had already sent some of that money to the IRS.

16:53Joe Shalaby:Once we revealed that the client had all their funds inside of a Cook Islands trust, and the plaintiff likely was going to get nothing if they proceeded with their case, the plaintiff agreed to settle the case for somewhere around$150 ,000, pennies on the dollar. I don't know how the case would have turned out if they did not have the Cook Islands trust in place, but I highly doubt it would have looked anything like the result we got then.

17:15Blake Harris:Well, let's say that$12 million was in a revocable trust here in the US. I mean, can they have pierced that trust?

17:22Joe Shalaby:Easily. A court could have ordered the client to revoke the trust and hand over the assets. With a revocable trust, typically the client's in charge. Even if the client's not in charge, the court will read the document and say the assets, the trust is revocable, revoke it and pay your debts. On top of that, if the assets were in the United States, even if it was an irrevocable trust in the United States, the court could have still gone after that asset as long as it sits here in the US. So if you want real protection, you do two things. You get the control offshore and you get the asset offshore.

17:49Joe Shalaby:And at that time, you're golden.

17:52Blake Harris:you know like i love hearing success stories because at the end of the day this is what we're passionate about this is what excites us and if we don't live a life of purpose like what's the

18:02Joe Shalaby:point right we don't live a life of purpose and a life with peace of mind too simply going through a lawsuit is going to be expensive it's going to be stressful it's going to bring some hard times maybe into your business it's going to into your personal life it's going to distract you from running your business, being able to settle a case quickly and move on. There's a lot of value in that.

18:24Blake Harris:Oh, of course. Well, I mean, I run a big business, so lawsuits are just part of the business. We have stacks of them. That's what we have in-house counsel. I mean, so for me, I'm just used to losses, but when it hits me personally that I'm not used to like the business, because we operate a massive one, it's no big deal. Losses are just part of the game personally.

18:41Joe Shalaby:like they're terrifying it's it's it's not fun and what i see happen sometimes is individuals get hit with these completely bogus claims but the individuals are wealthy and they're busy and they see how much it costs to defend a claim that they end up just paying settlements as opposed to spending the time money and effort and resources to defend a case and individuals become victims of legal extortion and i don't want that to happen to me and i'm certainly don't want that happen to any of my clients.

19:11Blake Harris:Now, pivoting a little bit, now you're kind of a big deal online. You're quoted in tons of publications. Now, how do you ensure that your public persona aligns with the serious nature of what you do for work?

19:25Joe Shalaby:So what I do for work, I take very seriously. I'm very careful with who we hire and how we train them. But I also, in both my personal and professional life, don't consider myself a very stuffy person. I am very laid back in how I communicate with clients because that's who I am. Also, it gives clients a lot of confidence. When I started in the practice of law 15 years ago, I was wearing a suit and tie every day because I didn't know what I was talking about and I needed to compensate. As I got more comfortable with what I was saying, I've become more comfortable in how I dress and it's very disarming and clients are much more willing to open up and share with me.

20:03Joe Shalaby:And I want that because that communication is very key to successful outcome and it gives clients more peace of mind too. So while we take our work very seriously, while we only work with the most reputable, while our team is very responsive, and I say all these great things about my firm, you can go online yourself and read our reviews. We have over 70 Google reviews, every single one is a five out of five stars. We do take it very seriously, but at the same time, we want to be approachable. We don't want clients to feel intimidated when they talk to me or anyone on our team.

20:34Blake Harris:I love that. It's all about delivering an incredible customer experience.

20:38Joe Shalaby:An incredible customer experience where they are comfortable from the first time they contact us until the relationship ends, whether that's months, years, or decades later.

20:47Blake Harris:So like the process of getting asset protection, you walk these guys through, and it takes several weeks to set something up, right?

20:56Joe Shalaby:So usually clients will fill out a contact form on our website or they'll give us a call. You We'll then have a call scheduled with one of the attorneys at our firm. We will then do an evaluation to see whether you'd be a good fit for an asset protection plan with our firm. A lot of people contact us and we tell them that we're not the right fit or we send them in some other direction. But for those who do fit the criteria and we think a Cook Islands or an offshore trust of some type would be beneficial, we'll then send them all the information needed to get started. The initial fee is around$30 ,000.

21:27Joe Shalaby:dollars. Once they've signed our engagement letter and submitted the initial fee, it takes about 30 days to get the trust established. Now, if clients are being very responsive and they have a fairly clean background, we can expedite that process. Once that's done, then we start the process of moving assets into the trust. That typically takes around 30 days to move the assets in, as well as get a bank account open. So all in about 60 days is what we quote clients, though in some circumstances, we have gotten everything set up a bit quicker than that.

21:54Blake Harris:Now on title and everything, you move all the properties into an offshore trust. Does it say like this is a Switzerland trust on the title? So the primary home will go directly into the

22:06Joe Shalaby:trust. Unless you're in a state like Florida or California, I'm sorry, Florida or Texas, where your home is already protected, or your home is already covered by homestead protection minus any debt, we will then put the home directly into the trust if there's any unprotected equity in the home. Other real estate should typically be held by an LLC registered in the state and the jurisdiction where the property is located. Then the LLC will go into the trust and a bank account will be opened directly into the name of the trust. So either the assets will go directly into the trust or go into an entity which the trust then owns.

22:39Blake Harris:Now, your firm offers services like crypto asset protection, which is obviously the biggest emerging market right now. How do you navigate the rapidly evolving regulatory landscape of these digital assets? It's insanely regulated right now.

22:58Joe Shalaby:So it is a changing landscape. And finding partners who are willing to hold crypto is something that we have put a lot of effort into at my firm. And meeting with the banks, custodians of crypto is something that we've made a lot of effort to. And I don't think any other asset protection law firm has done as much crypto asset protection as my firm. I'd venture to say we've probably done more crypto asset protection than everyone else in the industry combined. We give clients a few options for how they hold their crypto. If there's no pending litigation, we will assign the crypto to the trust and allow the client to keep the keys.

23:35Joe Shalaby:If there is pending or threatened litigation, we'll have the client to use a third party. That could be a third party vault. That could be a family member or a friend, preferably outside the United States, or with one of our banking relationships in Switzerland or Lechenstein that will hold the crypto through their bank. So there's a few different ways clients can hold it. But ultimately, it's still taxed the same way it would be taxed if you have the crypto yourself. It's a market that the demand for it swings with the crypto market. When Bitcoin goes on bull run, we get a lot more crypto calls when Bitcoin's tanking.

24:07Joe Shalaby:We still have clients who have crypto as a portion of the portfolio, but it just varies. But we're very well positioned to be the leading crypto

24:14Blake Harris:asset protection law firm wow i mean it's great to great to know great to hear and uh as uh you know even myself as i get more involved in the crypto space like and i have so many questions about even like the company like as a corporation our corporation you know who's always just you're being attacked left right and center just the bigger we are the more market share we get the bigger our national platform gets, the more targets on our back.

24:44Joe Shalaby:The larger an empire grows, the more vulnerable it becomes to attack, certainly. Yeah. Like I said at the beginning, a lawsuit is a badge of success. If you've been successful enough, you can expect to be sued. Still grow, still become as successful as possible, but have the proper defense in place.

25:01Blake Harris:I always refer to King David, where he would say, Lord, why do all my enemies multiply? Like, why? Why is this happening to me? Like, why do those who afflict me keep multiplying? It's just like out of nowhere. And what's like, so for a corporation is asset protection, you're like, this is the way to go.

25:22Joe Shalaby:So typically when we set up an offshore trust, it's either for an individual or for a married couple. Now, often that individual owns or has a large investment in a business. And our strategy for protecting a business is one of the following. You can put the business directly into the trust, or you can take as much out of that business as possible. So operate the business as thinly capitalized as possible. And then once you pull the assets out of the business, put that into your offshore trust. If the business has hard assets, we'd recommend taking the hard assets out of the business, selling them, maybe leasing them back from a third party.

25:58Joe Shalaby:So the business doesn't have a lot for somebody to take, take a poison pill, so to speak, put as much cash into the offshore trust. And all of a sudden, when the business has very little cash on hand, it becomes less appetizing to sue. And again, if the business gets sued, this gives the business leverage to negotiate and say, we don't have a lot of cash on hand for anyone to take.

26:18Blake Harris:So deplete the cash on hand.

26:21Joe Shalaby:Deplete the cash on hand, remove hard assets, and make it as thinly capitalized as possible. Run your business lean and mean.

26:27Blake Harris:Yeah. Unfortunately, because we're a bank, we can't really do that.

26:31Joe Shalaby:You would need to keep a little bit more cash on hand.

26:33Blake Harris:Yeah, we have to keep millions on hand cash.

26:36Joe Shalaby:So in your circumstances, it actually might be a situation where setting up a Cook Islands trust directly for the business makes sense so you can keep the bulk of the cash in an account offshore that a court can't force you to pull it back from. We would need to maybe offline have a little bit more of a discussion on how often and how much cash you need on hand and how much you could stick away for six months at a time. You always have access to it. You don't have to wait six months at a time, but if you're going to be accessing it within the next 30 days, it doesn't necessarily make sense to put it offshore.

27:06Blake Harris:And just out of curiosity, those offshore accounts, like bank accounts here, they're paying four or 5%. They're not paying much over there, are they?

27:12Joe Shalaby:It depends on how you invest the money. If you are holding it in, it depends on which currency you use, whether it's the Swiss franc or the US dollar or the euro. And beyond that, you can buy CDs or bonds or T-bills or invest in crypto stocks, bonds. So just depending on how much risk you want to take on, you can get whatever, aim for whatever return you want.

27:32Blake Harris:Okay. So it's still same thing.

27:35Joe Shalaby:All of the same investment options you have now, you'll have in the trust as well.

27:39Blake Harris:Okay. Now you wrote a book, it's called Asset Protection, Don't Let a Lossuit Take Everything. Now that offers tons of strategies guarding your wealth. What's a common misconception that readers have after reading it? What have you heard?

27:57Joe Shalaby:After reading it, they don't have any misconceptions yet, but before reading it, I think some of the misconceptions go back to, number one, the wealth needed to justify setting up an offshore trust. If you've got an individual worth$300 million and they get hit with a$5 million judgment, it's not really going to have any real effect on their standard of living or quality of life. But if there's an individual worth$3.5 million and they're hit with a$5 million judgment, that could have devastating effects on their standard of living and quality of life. So first of all, misconception is that an individual is not wealthy enough.

28:29Joe Shalaby:If you're a millionaire, you should definitely at least consider a look into setting up an asset protection trust. The other big mistake, and I sometimes wonder if even having a book causes more people to make this mistake, is putting it off. If you set up the asset protection plan while waters are calm, I can get you a very good result. If you wait until you've been sued, we may be able to do something to mitigate damage, but the result that you are going to get is not nearly as good as the one who plans ahead. an ounce of prevention is worth a pound of the cure.

29:02Blake Harris:Now, one thing I love about you is you always talk about the global network. Now, how do you vet these international partners? And how do you ensure they uphold the standards that I'm looking for, that you're looking for, that the firm's looking for?

29:20Joe Shalaby:So there's a couple of ways that I vet. I get out in the field and meet people in person. I'm flying tomorrow morning to Hong Kong to meet with some colleagues there. and speak at a conference there. I've been to the Cook Islands many times. And as I mentioned, I've been to dozens of different countries. And I travel extensively because there's a big element of how do you feel about a person when you meet them in person, that energy of meeting somebody in person. That's one thing that is very important to me. What does my gut say? And I'm a big believer in trusting your gut. Number two, their industry reputation.

29:52Joe Shalaby:The more people you know in the industry, the easier it is to get feedback on someone else, see how others have perceived working with this individual. That's a very important one. And then the third is how responsive are they? My firm, we're extremely responsive. I'm on my email more than I want to admit. And finding people in some of these smaller island countries who are responsive sometimes can be challenging. Sometimes you get a little bit of island time where they're a little bit slower to respond. And if they don't respond quick enough, then we're not going to work with them. We're going to work with somebody who operates at appropriate speed.

30:30Joe Shalaby:So it's three things. It's the gut feeling when you meet somebody in person, it's their overall reputation from people who I trust in the industry, and it is their response time.

30:41Blake Harris:Now, looking ahead, what do you think are some unconventional strategies you're exploring to keep the law firm alive and at the forefront of asset protection?

30:52Joe Shalaby:Well, we are always looking to grow. And what I'm looking to grow more so is vertically. I'm looking to see how we can find trust companies who will mold their process to fit our firm's process so that when clients hire us, we can streamline the onboarding process. And I'm doing the same thing where after I go to Hong Kong, a few days later, I'm going to Zurich and meeting with some of the banks we work there. I'm going to be talking about how they can simplify their onboarding process as well. What I want to deliver for my clients is not only the best value. And when I meet with our international partners, I'm negotiating.

31:30Joe Shalaby:I'm trying to get a better deal for my clients. I'm also trying to get a smoother and quicker process. long term my vision is going to be so is is such that a client hires us they submit one intake form we run this through our law firm we run this through the bank we run this through the trust company and faster than it can take some people to draw up a revocable trust we're able to set up an offshore trust i believe we can already do it probably quicker than anyone else in the industry because the quantity of work we do with these trust companies they will often push our clients ahead of other clients, but also getting it so that the banks are on board.

32:07Joe Shalaby:So as far as what are we doing that's unconventional, we are partnering and digging deep into the processes of our various offshore partners to streamline the process for our clients.

32:18Blake Harris:I love that. Now, pivoting the show a little bit, we're going to talk about the family. Now, you got two beautiful children.

32:26Joe Shalaby:The third one's not so cute. No, just two children total.

32:31Blake Harris:And your kids are growing up in a much more fortunate environment. How are you making sure that your kids grow up with that same resilience, that same level of grit that you've instilled in your life? So I was raised by a father who was an attorney and had his own practice.

32:55Joe Shalaby:And it was very much an inspiration and a model. And I feel like I'm doing a lot the same for my children where they see dad works a lot. Dad takes time off to be on one-on-one with his children and give them his undivided attention. But they understand that dad has to travel because dad's going to go out and do the best thing he can for himself and his career because that pays dividends to the family. So I think what's very important is being a good role model. Beyond that, I do like to, to the point that my children show an interest, expose them to the team that I work with. I've taken them to Switzerland.

33:35Joe Shalaby:They've met with some of the bankers we work with. I've taken them the past few summers to Nevis. We have a great time there as well. And when we travel, I very much put it on my children to figure out how we are going to get from point A to point B. So we show up at the airport and I say to the kids, where do we go from here? Well, what airline are we on? What flight are we on? They figured out. They figured out how to get us through security. They figured out how to get us onto the plane. And I just let them kind of lead the way because I want them to get comfortable figuring out things on their own.

34:05Joe Shalaby:And it's been wonderful. And I encourage everyone who's listening to this, if you're on the fence, go out and have children. Children are a wonderful thing. They take time. They take money. but there's no better place to spend your time and money than on your children. I've had no regrets about having children.

34:22Blake Harris:Best thing that ever happened to me. For sure. So I want like 20, but I can only afford four so far.

34:30Joe Shalaby:You're ahead of a lot of people there.

34:33Blake Harris:Now, a couple last questions. This is about goals, three-prong question. What's a personal goal that you have for yourself? a goal that you have for your business and a goal that you have for your family?

34:46Joe Shalaby:Okay. Well, I will start with my family. I would say that I want to make sure that as my children are entering their teenage years, that I continue to have the open relationship with my children where they are comfortable communicating with me. Those teenage years get tough for a variety of different reasons. And I want my children to still be very comfortable communicating with me honestly about their fears, about their excitement, about what they're excited about. Maintaining that relationship with my children is going to be very important. And so far, I think I've done a very good job at that.

35:29Joe Shalaby:I feel like I have a very good relationship with both of them. And I'd like that to not change. As far as the business is concerned, we have worked very hard to maintain the reputation that we have in the industry. And I would like to very much preserve that. We have a team of about 12 or 15 full-time employees right now. I don't look at that as a metric that I'm necessarily trying to grow. I'm much more interested in growing the number of clients we can serve and how well we serve them. A byproduct of that would be a growing team. But right now, we have a team that I'm very proud of. We've got some very smart, very talented, very detail-oriented, very hard working.

36:08Joe Shalaby:And I would like to see the team grow where we don't compromise the level of excellence that we have. And I could spend a whole another 45 minutes talking about how we employ a former trust officer from a Cook Islands and Nevis Trust Company, how we employ what I think are some of the smartest people in the asset protection field, how we have extremely well-trained support staff as well. So I'd like to really stay on course. I mean, I would like to grow the business too, but I'd like to stay on course and continue to maintain the brand. When people think of Blake Harris Law, I want the first thing that comes to their mind beyond offshore asset protection to be integrity.

36:49Joe Shalaby:When we say we're going to do something, we're going to do it. I'm not saying that mistakes don't get made. The mistakes are exceedingly rare, but I'm saying that our word is golden. As far as personal goals, I turn 40 here in a few months. I'm quite happy with the life I live. I have a lot of travel. I've got a lot of friends. I'm in the best physical shape I've been, but I would love to see my Muay Thai skills get better. I'm still a beginner of that. I may be a pro when it comes to asset protection, but I still suck when it comes to my fighting skills, and I'd like to see myself get better in that regard.

37:30Joe Shalaby:Maybe compete or something? Maybe. Maybe. Once I get the blessing of my coach, then I'll do that.

37:40Blake Harris:You'll do the next Van Damme.

37:41Joe Shalaby:I'd like to avoid any injuries and continue to have fun. Continue to have fun in what I'm doing with work and continue to enjoy the people I work with. You're doing it.

37:53Blake Harris:Podcasting, traveling, social media.

37:56Joe Shalaby:I'm doing it. I mean, it's been a lot that's gone on the last 39 years between schooling and college and law school and a marriage and a divorce and unpaid internships when I was younger and not working for the right people at a different time. I mean, I always work for the right people because it got me to where I am now and made me appreciate it now. But now I'm at a point where the energy is flowing well and I'm having fun. And I feel like I'm surrounded by a very loyal team, both in terms of my friends, but also in terms of the team I work with at Blake Harris Law. And I want to keep going.

38:32Blake Harris:Last question. Ask everybody this question. When you're in front of the pearly gates, what do you think God's going to tell you? Do you think God's going to tell me that I have left behind wonderful children who will

38:49Joe Shalaby:continue to spread God's love for all of humanity after I'm gone? I love that.

38:56Blake Harris:Blake Harris, if people want to find you, how do they do it?

38:59Joe Shalaby:BlakeHarrisLaw.com, at BlakeHarrisLaw is my Instagram, TikTok, X, Facebook, all the major platforms, Blake Harris Law, phone number is 833-ASK-BLAKE. but just Blake Harris law.com feel free to DM me on Instagram or shoot me an email Blake at Blake Harris law.com.

39:17Blake Harris:Blake, thank you so much for coming on the show. Thank you for flying in and doing the show. Thank you. Blake Harris, the man, the myth, the legend. Thank you guys for watching. Thanks Joseph.

39:40Me.