You should also determine which of your assets will go to the trust and what exactly you want the trust for. Form a trust deed or a written document that will contain these details. Then, ask your lawyer to cross examine the document. The final step is for you to choose a trustee to finalize and carry out the process.
With all the problems and financial instability that is plaguing the economy today, an offshore trust is probably the best method to protect your hard-earned assets.1 This is simply because it will help keep your valuable properties away from creditors and legal judgements. Putting your assets in an offshore trust means you are placing them under the protection of an offshore or foreign privacy law. Offshore trusts2 enable individuals or companies to manage their assets in a way that they can benefit the most. It is a method that is beyond the traditional way of safeguarding your assets against local tax laws and financial chaos in the country.
In taking care and protecting your assets,3 the most crucial thing is to find out whom you can trust. You can enjoy a lot of offshore trust benefits as a result of your careful selection of a trustee.
Why Should I Get An Offshore Trust?
Similar to onshore trusts, an offshore trust involves a settlor or a grantor who transfers the trust property or assets to the trustee for the benefit of an individual or group called beneficiaries. Settlors gain numerous offshore trust benefits which include the following.
- Asset Protection – one of the many offshore trust benefits is protection from creditors, lawsuits, unstable economy and legal judgements such as divorce or bankruptcy.
- Tax Planning – you are assured of an efficient tax structure for your assets and low to zero taxation rate from an offshore jurisdiction.
- Avoidance of Probate – any associated expenses and delays in probate are avoided since the trust is outside the country of residence.
- Confidentiality – asset confidentiality is a guaranteed peace of mind for settlors.
- Preservation of Family Assets – enable settlors to pass on trust assets through precise allocations as per agreement.
- Protection for the Weak – trust processes are carried out accurately and free from bias.
- Avoidance of Excessive Taxes on Property sales and Investments – personal and corporate assets may be sold without dealing with capital gains or corporation taxes.4
How Can I Get Them?
If you are planning to acquire offshore trust benefits, the first thing that you need to do is conduct an extensive financial review of your assets and decide on what trust structure will best fit your needs. Examples of trust structures are:
- Bare Trust – This kind of trust gives the beneficiary the right to access the income and assets of the trust.
- Fixed trust – The settlor creates a fixed condition of how the beneficiary is going to get the assets of the trust. An example of a fixed trust is a trust for a child when he reaches the age of 18.
- Discretionary trust – The settlor forms certain criteria for the trustee’s discretion on how the assets are going to be invested on behalf of the beneficiary.
The next thing to do is to decide who your beneficiaries are. You should also determine which of your assets will go to the trust and what exactly you want the trust for. Form a trust deed or a written document that will contain these details. Then, ask your lawyer to cross examine the document. The final step is for you to choose a trustee to finalize and carry out the process. To ensure maximum offshore trust benefits make sure that you appoint the best and most reputable offshore trust company that you can find. You can contact us and talk to our reputed financial adviser.
As financial privacy continually becomes an ever rarer commodity, an offshore trust is definitely where your assets should be.
A lot of people are aware that they are mandated by law to declare their assets and liabilities to their respective governments. But many are unaware that they can have complete financial privacy through offshore trust assets protection. You can transfer your assets to an offshore trust and get better returns and tax savings.
Transferring your assets to an offshore trust will put your assets beyond your country’s tax jurisdiction. However, your offshore assets will still be under the law of the foreign country where they are located. This makes an offshore trust the best and most affordable way to manage your finances with absolute privacy and confidentiality.
Costs & Assets
Transferring your assets to an offshore trust will involve certain costs. You can talk to a financial adviser and weigh up the benefits with the actual costs involved. If you reside in a country that imposes high taxes on income and investments, then, an offshore trust is the best option for you. In addition, confidentiality is one of the most the most sought after qualities that settlors look for in a foreign trust fund.
There are several countries that are considered to be the best places to keep one’s assets. These countries possess certain characteristics which makes them a haven for many investors. Almost any type of asset can be transferred to offshore trust assets. Offshore trust assets could be cash, securities, real estate, art, gold and businesses.
How To Choose The Right Jurisdiction
Today, more and more people are transferring their assets to offshore trust assets. However, there are things that you should consider before you transfer to a particular jurisdiction.
Factors such as the jurisdiction’s existing tax laws, political and economic status, communications, legal system, language, confidentiality and exchange controls should affect your decision in choosing the right jurisdiction.
- Low or No Tax Jurisdiction – the income earned by offshore trust assets should not be subject to taxation in any jurisdiction.
- Favorable Trust Laws – since there are a lot of foreign jurisdictions that fail to recognise offshore trusts or restrict these kinds of financial arrangements, it is important to make sure that a country has laws that allow flexibility to meet privacy and maximum offshore trust assets protection.
- Stable Government – the political and economic stability is an important factor to consider in choosing the right jurisdiction for your assets. A country with stable political and economic system guarantees strong offshore trust assets protection.
- Confidentiality – a chosen country must assure total confidentiality concerning the details of the trust.
- Language – it is essential that you are well versed and has thorough understanding of the country’s language. Language barriers may lead to unwanted and costly results. Communication with your chosen trustee must be easy and convenient.
- Exchange Controls5 – you must have the ability to easily move your funds in and out of a foreign country without interference or restriction from the authorities.
Choosing the right trustee and jurisdiction for the proper management of your assets is important. You can contact us and speak to our financial adviser if you need more information about which assets can be transferred to offshore trust assets.
There are several benefits you can receive with an offshore trust. However, because the trust is located in an offshore jurisdiction, many have questions pertaining to offshore trusts.
This offshore trust FAQ will answer most of your questions.
What Is An Offshore Trust?
An offshore trust just like any other trust is a contract or private legal agreement. An offshore trust is based on the trust deed’ which contains the agreement between the settlor and the trustee (individuals, trusts or corporations) and pertains to the management, protection and ultimate distribution of the assets to the named beneficiaries.
Who Is The Settlor?
The settlor is the person who transfers his wealth or assets to the trustee.
Who Is The Trustee?
The trustee is the person or corporate body to whom the assets have been transferred. The trustee ensures that the wishes of the settlor are carried out. He also ensures that the beneficiaries’ interests are protected.
Is An Offshore Trust Same As A Will?
In a sense, an offshore trust is a living will’. It works before and after the death of the settlor. An offshore trust can be revoked on the order of the settlor.
What Is Asset Protection In An Offshore Trust?
Asset protection trusts are created as a means of transferring your assets to the name of a trustee in order to protect against future litigation or other issues that may threaten to seize your assets.
Who Can Benefit From An Offshore Trust?
Anyone can benefit from the returns derived from an offshore trust. To benefit from an offshore trust, the individual must be residing offshore (not in the same jurisdiction as where the offshore trust is located). Investing in an offshore trust in a tax free or low tax jurisdiction will increase the possibility of greater returns.
How Much Money Do I Need To Invest In An Offshore Trust?
There is no set amount that you need to invest in an offshore trust. However, charges for opening bank accounts, communication, advice etc will cost you, so a minimum amount of $25000 is recommended.
What Is Withholding Tax?
When you receive dividend from your offshore trust, the country from which the payment is made might impose tax on the payment as it leaves the country by withholding a certain percentage. This percentage is called withholding tax’. If a double tax treaty exists between your country of residence and the country in which the offshore trust is held, then the tax could be reduced or you might be able to claim a portion or all the money withheld.
You can contact us and speak to our reputed financial adviser regarding any question that is not answered in this offshore trust FAQ.