Legal Instrument for Asset Protection in Switzerland

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Legal Instrument for Asset Protection in Switzerland

Fraudulent transfer rule has become a tool for creditor protection as opposed to asset protection in Switzerland. Such rule has allowed collectors to gain ownership of assets simply because there is proof that a debtor transferred his assets in the hope of getting away from paying his debts. In such instances, courts can allow reversal of transfer of assets since they have set the terms and conditions in determining such occurrences.

Bank account opened offshore such as in Switzerland can get added protection by putting up a limited liability company which will give one as the manager the right to control the bank account but not its ownership. The trustee of the bank accounts retains ownership of the same bank accounts. So that when a collector goes after a person’s assets lodged in bank accounts, the trustee is legally-bound to temporarily remove a person’s managerial rights and take over as both owner and manager. When the smoke has cleared, meaning creditor and debtor has come to a settlement; the trustee can reinstate the owner’s managerial rights as head of the company. Fraudulent transfer rules do not apply in this case because the assets or bank accounts have not been moved out of the reach of creditors.

However, this is not a hard and fast legal rule. Fraudulent transfer can only be skirted with absolute conviction if the establishment of the limited liability company as manager came no less than two years from the time of filing of bankruptcy or any court proceedings have been started. It is important then that these legal instruments be established long enough to prevent any such action to be labeled as fraudulent and can cause questions to arise on its legality. Asset protection is most effective when taken under preventive conditions instead of as a reaction to possible lawsuits or bankruptcy concerns.

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