Offshore Trust

The offshore trust is a trusted and well established offshore entity primarily used for estate planning and asset protection.. The offshore trust can maximize asset protection plan. The offshore trust as the name suggests is a trust registered in an offshore jurisdiction or tax haven. Offshore trusts are also known as exempt trusts or international trusts. In most havens, the offshore trust can be set up as either a charitable or non charitable trusts.

There are many prominent tax havens with laws for trust registrations, including Dominica, Nevis, Belize, Cook Islands, New Zealand, Anguilla, Cyprus, Isle of Man. Offshore trust formation is an easy process; a trust does not even have to be registered to be set up, but bets if it is. The benefits of an offshore trust are many and it is a strategic move. Offshore trusts are also formed to as part of tax planning strategies, where formed in offshore shelters, can benefit from many advantages.

The private trust structure has been in place since the 12th century, and the modern adaptation of the offshore trusts and regular trusts are similar in structure to the predecessor, but to enhance the trust entity, offshore jurisdictions make subtle yet beneficial changes to the trust laws.

The best trusts for asset protection are irrevocable trusts which see assets being transferred from a Settlor/ Grantor to a trustee which removes all legal ownership from the settlor. As an irrevocable trust it cannot be changed or annulled. The structure of this offshore trust makes it impossible for creditors or other parties to go after the settlor for assets since legally they no longer belong to this individual.

Offshore trust legislation makes it possible to protect trust assets in many other ways. Clauses in the Nevis offshore trust legislation makes it difficult for outside parties to law claim against the assets of a Nevis offshore trust in that the law asks for a deposit of US$ 25,000 to be made before any claims can be made. This hinders the process for going after assets in an offshore trust; the process is drawn out and deliberately costly so as to discourages creditors. Offshore jurisdictions which supply offshore trust formation do not recognise rulings of foreign courts and so an offshore trust will not be forced to give up assets based on the results of a foreign court case ruling.

Offshore asset protection is just one of the paybacks of an offshore trust. The offshore asset protection trust can be used alone in asset protection strategies or can be combined with one or more offshore entities or an offshore bank account to provide high levels of asset protection and privacy. An example of a solid set up: the offshore trust owns an offshore company (which handles the profit making and business operations). The profits from the company are transferred to an offshore bank account (company or trust account) and by doing this all transactions will be traced to the trust or offshore company and not an individual.

Offshore trusts are exempted from local taxation in the offshore jurisdiction where trust registration occurs. Offshore trusts are widely used as part or tax planning strategies and if registered in the right offshore tax haven will pay none of the following taxes; capital gains tax, inheritance tax, income tax, stamp duty and transfer duty. An offshore trust will be exempted from local taxes if none of the assets owned are located in the offshore tax haven. Offshore trusts can own vehicles, real estate, shares, stock and all other types of assets.

Offshore asset protections trusts can be set up with the assistance of an offshore registered agent in any of the offshore jurisdictions providing the services of offshore trust formation. Offshore agents are responsible for preparing all documents for offshore trust registration and they also provide a local registered address for offshore trusts in the jurisdictions. Offshore agents also provide trusts services of trustees. For offshore trust formation the following parties are needed; Settlor, Trustee and beneficiaries. The settlor can be named as a beneficiary of an offshore trust. A Trust Deed can be prepared which will dictate the terms of the trust as it concerns asset management, the circumstances under which a trust can come to an end and how assets are to be distributed and responsibility of the trustee can also be included.

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