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Grand Cayman Island, a British protectorate and the Switzerland of the Caribbean, about 100 miles south of Cuba, seems to reek of money, with a population of only 30,000 permanent residents and what seems like a fleet of new Jaguars, Porsches and Ferraris roaring around the narrow streets. My wife and I find our way to this paradise to visit our son, who is in veterinary school there.

On a trip last week, my curiosity overwhelmed me and I stopped in a building housing a Goldman Sachs and a Merrill Lynch office to inquire about the arcane financial tool known as the "offshore trust." Could any possible application make this a "loophole for the little guy?"

Offshore trusts have the stigma of being a repository for ill-gotten gains or tax havens for people who have something to hide. Apart from individuals, the financial press was quick to point out that Tyco International legally moved its headquarters from Rye, N.H., to Bermuda and promptly began avoiding $400 million a year in U.S. corporate income taxes.

For the rest of us, an offshore trust offers no tax benefits -- you still pay your U.S. taxes on the earnings -- but it does offer an opportunity to protect assets.

In our litigious society, or at least one in which businesses can be subject to substantial risks, it can make sense for some people to consider the asset protection device of an offshore trust. The person I grilled on the subject pointed out that British trust law is substantially different from the rules that apply in the United States, and that these rules go back to the time of the Holy Crusades. Picture knights in armor checking in with their trust officers before making that trek to the Middle East.

A trust, based on British laws, allows pretty much free access to the assets even though the "settler" (you or me) doesn't technically own those assets. This means that a future creditor or litigant can't get to the money. A new wrinkle, developed about six years ago and referred to as a STAR trust, combines a corporate structure with a trust instrument to give virtually complete control of the assets to the settler.

The assets in the trust would be the same as those a person might typically hold today: the usual collection of mutual funds, stocks, some real estate, etc. The set-up cost is reasonable: about $2,500 in one-time initial fees and four-tenths of a percent per year with a minimum annual charge of $1,200.

Who would benefit from a tool like this? Probably someone whose professional or personal circumstances make them vulnerable to costly lawsuits. A growing number of people in the professions choose to "go bare" with regard to insurance protection where premiums have become prohibitive. Where uninsured or inadequately insured medical bills are the greatest cause of personal bankruptcy today, some uninsurable people with this potential problem in their future might also find an offshore trust to be desirable.

My source of information pointed out that a trust must be set up before a problem arises. You can't set up a trust after a lawsuit or bankruptcy action has been filed, so anyone seeing clouds on the horizon would be wise to be proactive in the pursuit of this tool.

For me, it was all of academic interest only. On my way into the building, I stepped on a pop top and blew out a flip flop, so I hardly fit the image of an offshore trust customer.

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