Use a COP Entity

A solid plan makes use of the domestic side of the bridge as well as the offshore side. This concept looks at how you can organize U.S. assets before connecting that structure to a trust.

COP stands for charging order protection. The entities discussed in the recording are limited liability companies, or LLCs, and limited partnerships, or LPs.

The key comparison is with shares in a traditional corporation. Shares are assets held by the shareholder. A creditor with a judgment may be able to reach those shares. An LLC or partnership instead defines ownership through membership or partnership interests, which can have restrictions on who may become a member or partner.

A charging order is a court remedy directed at distributions that would otherwise go to the debtor-owner. Think of it as a right to receive that person’s share of money when distributions are made. It does not, by itself, make the creditor a manager with the power to run the business.

The recording emphasizes how those limits can affect a creditor’s position. A right to possible future distributions is very different from being able to take over the entity and its assets. The strength of that limit depends on the applicable law, the entity, and the facts.

This is why the entity’s rules and place of formation matter. The concept is to arrange assets in suitable domestic structures and coordinate those structures with the trust. But when you do the planning matters too. That is the subject of fraudulent conveyance.