Do you know how valuable the offshore trust can be as part of your estate, tax and wealth planning? This page provides information about offshore trusts. It covers the advantages of the trust and the trust services we offer our clients. This information is essential in helping our clients determine if the offshore trust is suitable entity for their needs.
The trust is an entity that has been around for a very long time dating back to the 12th century. The trust is created when the settlor (the person creating the trust) transfers specified assets into the trusts and prepares an agreement called the trust Deed (also known as Deed of trust or Declaration of trust) in which he identifies a trustee (the person in charge of the trust) and the beneficiary (the person who receives benefits from the trust). As a result of the legal transfer of assets, the trust is used as a multipurpose vehicle for asset protection and estate planning (where the trust often replaces the will). The offshore trust is a trust set up in an offshore jurisdiction.
Once the settlor gifts his assets (of any kind) to the trust, the assets belong to the trust and not the settlor. This means that these assets cannot be legally attached to the settlor, though the settlor can maintain full control of the assets through instructions in the trust deed.
The assets held in an offshore trust may include, but are not limited to, cash, real estate (property), a business, investment assets, and life insurance policies.
Offshore Trust Purpose
- Privacy — whilst the terms of a will are public, the terms of a trust remain completely private, and as such trusts are often created for the sole purpose of privacy.
- Asset protection — the trust allows a person or company to legally separate self from their assets; as a result the assets are out of reach where the person otherwise would be at risk.
- Spendthrift protection — not all of us are good at or capable of managing money or our other assets, and a trust is one way to protect the beneficiaries’ interest from mishandling by offering controlled and specific instructions for the disbursement of cash or other benefits.
- Estate (will) Planning — usually used to protect the interest of family member(s), where part or all of an estate is held in trust with disbursement instructions and a maturity date or age at which some part or the whole of the estate is disbursed to a beneficiary(s).
- Employee savings and pension plans — a trust is used to hold the investment of pension plans, where the employer is the settlor and the employees and their dependents are the beneficiaries. This works to protect investment from risk and liability.
International Trust Advantages
There are many other advantages of the exempt trust, the most important highlighted below:
- Confidentiality & Privacy
the existence of a trust is registered but the identity of the key parties is not documented or recorded anywhere with public access. Any assets in a trust such as real estate, cash and other assets can be held in absolute privacy.
- Tax savings
Assets placed in an international trust (which is located in a tax-free jurisdiction) are not taxable at time of disbursement.
- Timely & affordable transfer of assets to successors or beneficiaries
An estate may be passed onto heirs by way of a trust with more favorable tax conditions and does not involve the high cost and time of probate.
- Asset protection
A trust will give protection from litigation such as malpractice claims, forced heirship, product liability, divorce proceeding, foreign judgments and creditors.
- Accumulation of wealth
International trusts may own and operate companies, bank accounts, and invest in international markets while wealth accumulates in a more tax friendly environment.
Secure your assets in a trust and safe guard against financial, political and economic instability.
the property protected by the trust can be assets in any form or any kind — such as real estate property, shares in a company, copyrights, patents, currency, jewellery, securities, art etc.
International trust can be created during a person’s life or after death through a will and the creator can transfer ownership of assets in a controlled and safe manner, while maintaining final control.
Irrevocable and Revocable Offshore Trust
International trusts are designed to be either revocable or irrevocable. A trust that may be changed or terminated during the grantor’s lifetime is called a revocable trust. The revocable trust is best when replacing a will, in that if you are no longer satisfied with a provision in the trust or want to change a beneficiary or fiduciary, then you can easily alter the terms of the trust through a trust amendment. Similarly, if you decide that you don’t want to have a trust anymore you can either revoke the entire trust agreement or change the entire contents through an amendment. As the revocable trust may be changed at any time until the settlor’s death, it is considered part of the settlor’s estate and is subject to taxation, and liability of the settlor. For this reason we do not recommended the revocable trust for asset protection. Under a revocable trust, the assets are passed on to the beneficiaries only after the settlor’s death.
On the other hand, the irrevocable trust cannot be changed or voided without the consent of the beneficiary (the settlor can be the beneficiary) nor can contributions be taken out of the trust. The benefit of this type of trust for assets protection is that it removes all incidents of ownership, effectively removing the trust’s assets from the settlor’s taxable estate and settlor’s liabilities. The settlor is also relieved of the taxes on the income generated by the assets. Under the irrevocable trust assets can be distributed during the life of the settlor, opposite of revocable trust.
Offshore Trust — Key Persons
- The settlor of the offshore trust is the entity who establishes the trust and can be a person(s), a corporation or another legal body.
- The trustee is responsible for the management and administration of the trust. The trustee can be a person(s) or a corporate body. In Nevis, one of the trustees must either be a trust company doing business in Nevis or a Nevis IBC.
- The beneficiary is the recipient or the final owner of the property contained in the trust, the beneficiary can be identified by name, relationship or class, and can be one or as many as defined.
Our Offshore Trust Services
Both the Nevis Trust and the Belize (exempt) Trust must be set up using the services of a registered and licensed agent like CCP Inc. Our offshore trust formation services for Nevis Trust and Belize Trusts includes: the formation of trust; trust deed preparation, provision of corporate trustee, safe holding of trust documentation and trust record You can order an Offshore Trust Formation by itself or combine it for further benefits with an offshore IBC or an offshore LLC see our Offshore Asset Protection Packages. Shares of the established IBC can be held by a trust, providing an additional layer of protection.
Why form your trust with CCP?
Our Belize and Nevis Offshore Trusts:
- Can be formed easily
- Are competitively priced and affordable
- May be used for any legal purpose outside the jurisdiction
- May hold assets in its name, such as IBC shares
- Have no auditing, accounting or financial requirements
- Settlor may create protective trusts in their favour (by acting as trustees, or being the beneficiaries, not recommended if asset protection is main objective)
- Allows charitable and non-charitable trusts
- Allows revocable and irrevocable trust
Order Your Offshore Trust from US $1240