A trust is an instrument which is established for the sole purpose of laying down the rules that will apply to the distribution of your estate. The trust holds your assets and gains for your beneficiaries. The objective is to reduce the tax liability, to provide protection for your estate and to avoid probate.
An offshore trust is no different except by setting it up in a centre where you are assured of 100% confidentiality and additional tax benefits that are often associated with these jurisdictions. The arrangements for both onshore and offshore trusts are the same. This article will give you a more in-depth offshore trust overview to help you decide whether or not you need to protect your assets and gains in a foreign jurisdiction.
How It Works
Offshore trust overview – The trust is established by the person who is known as the settlor and a person or group known as the trustee. The arrangements that are made between the two parties are known as the Deed of Trust and it contains all the asset titles, funds and property. The trustee manages these assets and gains in accordance with the demands of the settlor. The trust proceeds are provided to individuals or a group of people UK residents known as the beneficiaries.
An offshore trust,1 although the same as the onshore trust in principle has the ability to provide greater asset protection. The trust company and the settlor enter into a trust agreement which sets out the duties of the trustee and all the requirements set out in the deed. The deed of trust2 is a binding arrangement.
Offshore trust overview – its benefits and what you should know. Offshore trusts are set up for various reasons, most of which are oriented toward a secure retirement or to provide for any children. The details of the trust are laid out prior to the final agreement. Such things as the revocability, the discretion and all the rights and obligations of the parties must be defined to the preference of the settlor.
The primary differences are the revocability clause. The trust may be established in such a way that it can be revoked at any time or it can be made such that it must run to a predetermined point in time. A discretionary trust which is the most common type of offshore trust can either be revocable or non-revocable. The settlor is allowed to add or delete beneficiaries during the life of the trust.
The benefits of an offshore trust are also attached to tax considerations. The trusts are always set up in a jurisdiction that ensures assets3 and gains protection and confidentiality. If the purpose of the trust is to provide benefit for the beneficiaries of the settlor, the distribution will be free of taxes as long as the beneficiaries are non-residents of the trust’s jurisdiction.
You will need to 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 finalise and carry out the process.
Furthermore, due to the intense secrecy, the details of the estate are not divulged and are therefore protected from civil litigation, divorce or business dissolutions. Other than criminal activity, the trust is impregnable; an outside entity will never be given access to the trust’s details.
This offshore trust overview shows that there’s no better way to become lawsuit-proof than putting your assets and gains in an offshore trust. You can contact us and speak to our adviser to get a better understanding of this asset protection vehicle.
What Is An Offshore Trust
An offshore trust is an effective means of protecting your assets against property laws and taxation of the country where you reside. It’s used by many to avoid one of the most certain things in life; taxes. The word “trust” refers to the obligations of the trustee in relation to the assets which are transferred to his control.
In addition, an offshore trust is a normal trust where assets are held under the laws of a foreign jurisdiction. Managing one’s finances is a bit tricky, especially for the inexperienced. So, here’s a closer look at what is an offshore trust’ is and what benefits it can give you.
What Can It Do For You?
What’s an offshore trust? Similar to their inshore counterparts, offshore trusts involve a settlor, a trustee, and resident beneficiaries. A trust company by definition is an independent administration entity owned by another firm, bank, or law firm. Its main goal is to deal with the management of trust funds, assets and estates of an individual, a business or corporations.
A trust company can do all the work for you by dealing with the legal aspects and other complex matters related to the overseeing or distribution of your estates and funds.
What’s an offshore trust and what can it do for you? Corporate Trust companies make sure that all your requests and/or wishes are set in motion and strictly followed. These corporate companies can also perform an array of other services which can be tailored depending on the needs of the individuals. Examples of such may include propositions for alternative investments like natural resources, hedge funds, private equities and limited partnerships.
Costs and Taxes
When an inshore trust doesn’t suit your needs, perhaps what you need is to move offshore. The common perception about offshore trusts, that it’s only for multimillionaires and big corporations, is wrong. It’s also suitable for medium to small scale businesses and individuals.
Many people have transferred to an offshore trust because the benefits are more attractive compared to the benefits received with an onshore trust. You should take into considerations offshore trust costs before you transfer your assets. Though the benefits are there, it’s advisable to consult a financial adviser to determine offshore trust costs.
How Important Is It?
Employing the services of a trust company in managing your finances can help save you a lot of time and effort. Apart from being able to offer a variety of services to their resident individuals in one centralised location, it also eradicates the need for clients to coordinate with people like brokers, planners, attorneys, and tax advisers regarding the status of their accounts.
In this setting, you as the client need only speak to a single person in terms of handling all your funds, making the process a bit less stressful and a lot easier on your end.
Also, since corporate trust companies are managed by specialist who acts on behalf of their customers in a fiduciary level, you are then assured that they will be taking your best interests in mind in every transaction they perform or decisions they will have to make.
You can contact us and speak to our reputed adviser if you want to know more on what is an offshore trust.
An offshore trust explanation is what you need for proper safekeeping of your assets.4 Transferring your assets to an offshore trust could offer you better benefits and possibly greater tax savings.
What Is An Offshore Trust?
An offshore trust can be located in any country or jurisdiction5 as long as the country recognises the legal concept of that trust. An offshore trust is basically the same as an onshore trust; however, an offshore trust has different laws that make its jurisdiction a better place to transfer assets. An offshore trust is simply one which is managed by non-UK resident trustees.
There are several offshore jurisdictions, but not all offer the same benefits. Some jurisdictions have very favourable laws that have been specifically created to protect the assets of a trust or beneficiary. One of the best ways to safeguard your assets is to have it transferred to an offshore trust that offers attractive benefits and greater protection.
How It Works
An offshore trust has three major players – the settlor who transfers the assets to the offshore trust, the trustee who receives and manages the assets and lastly, the beneficiary(s) of the assets. A trust deed is created as a binding legal document that contains all the details of the transaction which includes the name of beneficiary(s), total assets and terms and conditions.
It is crucial that a settlor chooses the right trustee to ensure positive results. The proper selection of foreign jurisdiction for offshore assets is essential for optimum protection. A settlor should also seek a lawyer’s assistance to give him a thorough offshore trust explanation.
There many reasons why an offshore trust is one of the most effective vehicles to protect one’s assets. The main reason why most people go overseas to keep their assets is because an offshore trust is usually beyond the jurisdiction of a settlor’s country of residence.
For example, if a settlor has litigation issues there could be an active threat which could lead to the loss of his wealth in a lawsuit. If his assets are in an offshore trust then he places his assets beyond his own country’s jurisdiction. It’s likely that the creditor or complainant will not pursue the case or the claim outside of the country of residence because of practical and economic reasons.
One of the important things about an offshore trust explanation is disproving the misconception that settlors can use this asset protection tool to evade taxes. There’s nothing wrong with foreign trusts as long as they are lawfully used. It’s important to note that your assets transferred to an offshore trust could be liable to certain taxes in your chosen jurisdiction. It’s advisable to talk to a financial adviser regarding taxes and other charges.
It is essential that you understand the benefits, process and the consequences of forming an offshore trust. You can contact us and speak to our reputed financial adviser for any question you may have regarding offshore trust explanation.
A lot of people invest in offshore trusts because of the numerous benefits that they provide. Offshore trust assets have the potential for more substantial and faster return on investments than domestic opportunities. What you need is to invest in an offshore trust as a means for safeguarding your properties from the costly effects of litigation, unstable economies and excessive taxation.
What makes an offshore trust so popular worldwide is that there can are no local taxes associated with the trust assets and its total income. Here are a few things concerning offshore trust eligibility.
Am I Qualified To Get An Offshore Trust?
Anyone can invest in an offshore trust as long as they have assets to protect and resources to afford the trust. If you want to preserve their wealth against financial and political instabilities within your country, then an offshore trust can prove to be very beneficial.
Furthermore, offshore trusts are for those who plan to maximise their assets for the benefit of their family members and others. It can also be an effective means to transfer wealth to your beneficiary(s) in a very tax-efficient way. Investing in an offshore trust could also eliminate the need to pay estate taxes on the event of your death.
A settlor can put all kinds of assets in the trust which includes shares and stocks, real property, bank deposits, intellectual property, investment portfolios, life insurance policies and much more.
How Can I Get An Offshore Trust?
If you are planning to invest in an offshore trust, the first thing to do is to assess the value of your assets and decide which assets you are going to transfer to the trust for your beneficiary. Once you are through with this, you can ask your lawyer to help you write a trust deed. You will need to consult an offshore trust company to help you on your first steps towards a more improved asset protection method. It’s then time to decide which jurisdiction is favourable to your needs. Offshore trust benefits vary from one jurisdiction to another. So, it’s critical that you set up an offshore trust in a jurisdiction where your assets are well protected and at the same time grow at a significant rate.
Here are the four most important characteristics that you should look for when choosing the perfect jurisdiction for your offshore trust eligibility.
- The best jurisdiction should have commendable track record when it comes to enforcing offshore trusts
- The best jurisdiction should be based on an English Common Law system
- The best jurisdiction should have a long-standing and excellent reputation in the trust business
- The best jurisdiction should know and incorporate modern legislation and trust concepts on the trust
It is important that you seek the expert assistance of an offshore company or adviser to guide you through this undertaking. You can contact us and talk to our financial adviser about any offshore trust eligibility questions that you might have.