1. What Are Trusts?
A Trust is an agreement that allows separation of legal and beneficial ownership amongst a number of individuals. These individuals are you, the Settlor who transfer legal ownership (title) of the assets to a Trustee who holds and administers the assets solely for you and your Beneficiaries in accordance with instructions yous specify in the written Trust Document. A trust is very flexible. The wealthy have been using Trusts for years. An offshore Trust is an excellent way to maintain wealth, and to secure your families' future, free from frivolous lawsuits.
2. What Is A Discretionary Trust?
Trustees are given powers to act as they see fit. Distribution to any of the beneficiaries is at the discretion of the Trustee. However, if the Trustee does not follow your requests which are embodied in your Letter of Wishes, the Protectior (who can be you) can replace him. Offshore discretionary trusts have proven more effective then any other method for the protection of family wealth.
3. What Is Contained In A Trust Document?
This private agreement between you, the Settlo,r and the Trustee may be drawn up in many different ways in order to define your desires and concerns. While the specific instructions in the Trust document may vary greatly from case to case, the necessary features are:
- Naming of the Trustee.
- Defining the terms and conditions under which the Trustee can be removed or resign.
- Defining the Trustee's powers and restrictions.
- Describing the Trust Property.
- Naming the Beneficiaries and describing how each is to benefit.
- Naming of the Settlor, the person who contributes the assets to the Trust.
- This Settlor transfers legal ownership of his asset to the Trustee.
- The Trust Property can be increased at any time.
4. Who Is The Trust's Settlor?
You, the person who created the Trust.
5. What Is A Trustee?
The Trustee is the person or corporation into whose ownership assets are transferred. It is the duty of the Trustee to ensure that your wishes are carried out and the beneficiaries' interests protected. The Protector (who can be you) can replace the Trustee..
6. What Is A Trust Protector?
The Protector provides oversight of trust operations to ensure your objectives are met. You can name the protector and may even assume that position. A protector does not manage the trust but can veto trustee actions, The protector also has the right to replace the trustee with or without cause.
7. Can You Name Yourself The Protector Of The Trust?
You can..
8. What Are Trusts Beneficiaries?
A Beneficiary is any person or persons or any other legal entity, including another Trust or a Charitable Organization, who will benefit under the terms of the Trust. .
9. How Do Offshore Trusts Work?
It's creation and operation is made possible by legislation in the offshore jurisdictions where the trust resides.
10. Asset Protection
Due to the proliferation of lawsuits, government confiscation, and new laws enacted to “protect us” from ourselves, wealthy people have set up offshore trusts. By having title to assets like stock or real property held by foreign trustees, protected from creditors. At the same time ownership benefits (like income) can still be enjoyed as before.
If you are in dispute with a Federal Agency, it is very easy for a bureaucrat to press a button on his PC. He enters your social security number, and is able to identify your bank accounts, securities, and real estate and “freeze” them and your bank and brokerage accounts are transferred to the government. With assets held abroad, it is not possible for a creditor to locate them. It is virtually impossible to confiscate trust assets. Why? Lawyers of bureaucrats and plaintiffs don't like difficult investigations and long, drawn out court procedures. Seizing assets in most countries only comes into play when the issue is involved with serious crimes. With your trust it is possible for you to access funds, instantly, in cash, twenty–four hours a day, anywhere in the world.
Ethically challenged lawyers are constantly sniffing out potential defendants by identifying high net worth individuals. By keeping assets in an offshore trust you lower your visible level of wealth. This makes you a far less attractive victim. Before a contingent fee lawyer will file suit, he always gets a full report on your assets. Since funds and properties held in an offshore trust are invisible lawsuits are avoided or favorably settled. The same reasoning, reducing your visible net worth, goes for repelling ex–spouses and disgruntled business associates.
11. Asset Protection Continued
If you have worked hard to accumulate assets, spend a little time to protect them so they don't disappear! Offshore trusts are created as a tax–neutral method of transferring the ownership of your assets into the name of a Trustee prior to any litigation or other attack, because:
- They Can't Take What You Don't Own! You probably do not carry a months supply of cash in your wallet…Why? Because someone might take it, right? In asset protection, once your assets have been transferred to an Offshore trust, they are safe. They can't be levied or seized by creditors because they aren't yours.
- They Can't Take It Away From You, If They Can't Find It! Imagine you are a creditor. Where would you begin to look for something that could be located in one of numerous Countries around the World? What if it was not registered with any Government or on any list, directory, or other public document? Even if you were lucky in locating it, it could instantly move somewhere else…would you keep looking? I don't think so!
- It must be Legal! The trust must be designed to conform with International law. When done correctly, you will have the full force of the laws of that nation to protect you from the danger of expropriation by government agencies, creditors, divorce attorneys, or other litigation.
In order to receive the full benefit of an offshore trust, it must be established prior to you being served. Think of a trust as preventative medicine, not as an antidote for active litigation.
12. Where Are The Trust Jurisdictions?
There are a number of countries which have enacted asset protection legislation. Among them are Belize and the Cook Islands.
13. What Are Some Of The Risks Involved In Offshore Trusts?
U.S. lawmakers and the IRS do not like the idea that people can avoid payment to their creditors by moving their assets out of the U.S. The courts may be hostile to your offshore assets but they are powerless to get at them.
14. Key Concepts
- Nobody can take your assets away without first obtaining a judgment. Except in the case of the IRS or in certain divorce situations..
- Protection strategies are best implemented when the financial seas are calm. Once attacks have mounted, it is sometimes too late to do any serious protecting. You work hard to make your money. Take the effort now toward protecting your nest egg.
- What judgment creditors don't know about can't be taken. Stealth works. Never volunteer anything.
- Judgment creditors can only take what you own. If you own nothing, they can take nothing.
- Many offshore jurisdictions will not recognize judgments from a US court. To enforce a US judgment offshore, the case must be re–litigated in the country where the trust is located.
- The U.S. is one of the few country which permits contingent fee litigation. In all other countries it is unethical for an attorney to take a case on a contingent fee basis. Lawyers may only be retained for cash. In addition in many offshore jurisdictions the creditor must post cash with the court to pay your costs if he is unsuccessful.
15. What Are The Reasons For Placing Assets In Offshore Trusts?
- Economic diversification;
- Achievement of a “Low Profile” with respect to wealth;
- Premarital planning;
- Marital property planning;
- Participation in investments not otherwise available to U.S. investors;
- Pre planning in anticipation of currency controls or restrictions on ownership of bullion; and
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Liability protection.
16. What Are Some Key Benefits Of Offshore Trusts?
- To hold an offshore International Business Corporation (IBC).
- Multinational trading.
- Protection of assets.
- Preserving family wealth. Trusts can be used to arrange for wealth to be passed to your spouse and children. Trusts may avoid complicated court procedures relating to probate. They can also assure that assets will be used by the beneficiaries in the way intended.
- Trusts are confidential and flexible. You enjoy privacy as to your investments. The Trust Document is not public and is handled with absolute confidentiality.
17. Privacy, Anonymity and Flexibility
Under most offshore law, the Trust is a confidential document. No information about it is available to any external authority. Flexibility within the Trust Deed, is provided by the following::
- Provisions that provide that the Trust can be revoked or terminated;
- Provisions that provide the Trustee can be removed;
- Provisions that the Trust, can be transferred to another jurisdiction should it be felt that political developments or creditor issues make this a prudent precaution;
- Policies on administration and disposition of the assets can be modified.
18. How Do You Transfer Assets To Your Offshore Trust?
Depending on the particular assets to be transferred, this can be done in one of the following ways:
- Funds are sent by wire transfers,
- Stocks, Bonds, etc. can be transferred with a phone call to your broker,
- Personal Property can be transferred by a bill of sale,
- Real Estate is normally conveyed as a “quit claim” deed, and.
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Some people choose to refinance or pull the equity out of their assets so they can transfer the funds to their trust..
19. What Power Does A U.S. Court Have Over You Of Your Offshore Trust?
A U.S. court can order you to repatriate offshore funds under threat of contempt and fines. That possibility is negated by an “anti–duress clause” in the Trust. The clause permits you to truthfully claim that you are legally unable to comply with the court's demand since the foreign trustee will not honor your under "duress" instructions.
20. What Does “Offshore” Mean? What Is “Going Offshore?”
Offshore refers to doing business in another country, with advantages of asset protection, privacy, low taxation and stable government currency control.
21. Is It Illegal To Move Assets Offshore Or Have “Offshore Bank Accounts?”
It is legal to have accounts and assets almost anywhere in the world. Assets and profits should be declared according to the IRS Reporting Requirements or else you will be subject to penalties and fines. Setting up offshore is legal, however, withholding information about income is illegal.
22. Isn't “Going Offshore” Only For The Rich?
Setting up offshore is now a relatively affordable procedure for almost anyone. Moving all or part of your assets offshore, opens up a whole new world of creditor–proof investment opportunities.
23. What Is Bank Secrecy?
In some offshore jurisdictions it is a criminal offence for bankers to divulge any information about a client's account. Exceptions are made for suspected money laundering, criminal activity, or terrorism.
24. Is My Money Safe Offshore?
Offshore investing done through reputable companies is as safe of safer than investing onshore. Higher reserves and greater liquidity ratios are usually found in offshore financial institutions as compared to their onshore counterparts. In secure offshore jurisdictions these problems are nonexistent because of stricter banking laws, conservative investment policies and lack of shareholder pressure to maximize profits (which results in higher risk taking on loans and investments).
25. Should I Use More Than One Offshore Centre?
Different jurisdictions have different advantages. Depending on your planning, you may find it useful to use different jurisdictions in your offshore structure.
26. Is It Easy To Dissolve An Offshore Trust?
Dissolving an offshore trust usually costs no more than a filing fee and a few hours of a lawyer's time. If it would be costly to dissolve a given structure, you can simply remove all the assets from the structure and then leave the empty structure to be stricken from the jurisdiction's register.
27. What Is Money–Laundering?
Money laundering is the conversion of 'illegal' money into 'legal' money.
28. Is It Legal For Me To Make Offshore Investments?
It is not illegal for you to make offshore investments. It is illegal for you not to declare the income or gains from offshore investments.
29. What Is A Double Taxation Treaty?
An agreement between two countries intended to relieve persons who would otherwise be subject to tax in both countries from being taxed twice in respect of the same transactions or events. By and large, most offshore jurisdictions have no double taxation treaties, since they don't have local taxation. .
30. Can I Invest In Non–SEC Registered Offshore Funds?
Americans are forbidden by law from investing in over 95% of the opportunities of the world. Before securities can be purchased by a US citizen, they must be approved by the Securities and Exchange Commission. Gaining such approval is an expensive bureaucratic procedure. Most companies never bother. As a result, most of the world's funds can't be sold to US citizens. The way out of this entails establishing an Offshore Trust to hold these investments.
31. Can I Invest in Any Stocks, Property or Other Assets That I Choose?
Yes.
32. Are Offshore Trusts Expensive?
Offshore Trusts are not necessarily expensive but you need to bear in mind that there are costs for legal advice, trust construction as well as the ongoing fees and other costs such as the management of the portfolio.
33. How Do I Begin?
Begin by calling us at: 1-818-906-0126 for a free consultation to answer all your questions and to determine which of the above three types Trusts is right for your needs.
