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The use of a Trust for asset protection and estate planning dates back several centuries. Trusts were common in England early in the 11th century. In some form the trust was an instrument for holding property in Roman times. Developed over time, Trusts have become a seriously effective means of minimizing taxes, protecting assets and passing wealth along to heirs in privacy and without devastating tax consequences.
The very wealthy have used the trust approach for many years. Recent development in the offshore world where more and more jurisdictions adopt effective laws, the trust has become an instrument available to people of lesser means. For nominal costs, minimal formalities and on short notice, a trust can come into being. We invite you to consider the trust a part of your personal and corporate financial planning, either alone or in conjunction with a IBC (International Business Company).
Some Information About A Trust
In general, a trust involves:
Types of Trusts
While we will assist in the establishment of a trust wherein the settlor or grantor retain absolute direct control of the trust assets by becoming the Trustee or by some other means, we are reluctant to do so. If the property is not within the absolute and discretionary control of the Trustee who is not the grantor or settlor, and the grantor or settlor retains overt control, little is accomplished as relates to asset protection especially, and to tax avoidance or minimization, typically.
Laws in high tax countries specify that if the tax payer controls the property, then he must pay the taxes on the assets or earnings on the trust property.
The Discretionary Trust provides for a party to serve as the Settlor, being himself beyond the jurisdiction of the beneficiaries. The actual property can come from any place and be any thing. With a Discretionary Trust, the Trustee can add to the list of beneficiaries or remove beneficiaries. Certainly, in a Discretionary Trust, the Trustee has control over the property. This type of Trust is almost exclusively used for asset protection and tax and estate planning.
As already referred to, under current tax laws and regulations in the high tax or "sophisticated" countries where the Common Law trust is known, if the beneficiaries are know, there might be a decision to claim taxes due, even though there has been no distribution. The confidentiality laws of most offshore jurisdictions take this into account. With the confidentiality feature, there is not chance that anyone can get information as to who beneficiaries are.
To fill in the gaps where beneficiaries are not named in the Trust Deed or Trust Instrument, a Letter of Wishes filed with the Trustee to specify the Beneficiaries and their interest trust property will suffice.
Also, where the Trust Deed does not specify details relative to distributions, a letter of wishes may be filed at any time by the beneficiary. Laws in most jurisdictions allow for this while not revoking the irrevocability feature of the trust.
A Letter of Wishes may be filed at the time of initiating the Trust or at any time thereafter.
For Asset Protection
In litigious countries such as the United States, it has become common practice for individuals to seek offshore trusts for protection against:
A trust cannot be all things to all people in all situations. Multiple trusts might be called for: One for tax reduction, another for minimizing liability by holding physical assets.
Speed Where Speed Is Important
A trust can be established in minutes, literally. While it might take longer to have property transferred into a trust, time can be a factor as to the dating of the Deed. Generally, a Trust Deed is not registered with any tax jurisdiction. A trust is a private arrangement. Normally, there is no requirement for accounting reports to any agency. On the contrary, there is no access provided to the activities of the trustee except as arranged by the parties or through the courts, and that is not easy.
The Advantages of an Offshore Trust
1. Tax savings, avoidance and deferral: You can save, avoid and defer many taxes in many ways. You don't owe tax until you "repatriate" your assets, whether they be cash or the very house you're sitting in now. Any asset can be designated Trust Property. And if the Trust is in another jurisdiction, chances are those assets can earn interest, or accrue whatever pertinent value without being subject to domestic taxes.
2. Safety: Keeping assets offshore provides you a financial reserve should disaster strike at home, or in your domestic financial life.
3. Protection Against Judgment: In a lawsuit-happy world it's nice to have reserves that can't be "seized", "liened" or "attached" with the stroke of the Court's pen or the phone call of a tax authority. Though not impossible for them to get at, it's much much harder for them to attach your assets, when they're held in Trust, offshore, by a Trustee who isn't beholden to anyone but the wishes and the good of the beneficiaries.
4. Confidentiality: A private contract, a legal agreement, and the business of no one but your's, the trustee's, and whomever else you think needs to know. The offshore Trustee is required to say nothing to external inquisitors.
5. Ease of Transfer of Interest to Heirs or Others: Wills, living trusts, and domestic trusts invariably pay taxes - especially when assets are transferred. An offshore trust does not.
6. Earnings and a Faster Accumulation of Wealth: Trusts can own companies, have bank accounts, own portfolios, hold trading accounts. and not pay taxes.
The Trust is one of the most flexible financial instruments and entities to ever come about.
Other reasons why you would want a Trust
In a world where certain inalienable rights such as privacy, confidentiality, and prosperity are being diminished, trust accounts have proven to be an inspired manner whereby those rights may be maintained. It's how the very wealthy remain very wealthy.
Increasingly, laws are being passed that allow personal assets such as cars, homes, and other personal possessions to be seized to satisfy court judgments (no matter how frivolous) against us, our businesses, or estates.
This sudden seizure of assets could result from, among other things, neglecting to keep proper personal or financial records.
If the Tax Authorities or IRS pierce our corporate veil, deny our tax benefits or present us with a big tax bill, it can be extremely and unnecessarily traumatic.
If we don't pay, they file a "Notice of Tax Lien" or "Default" which liens all our property, real and personal. We attempt to borrow money to pay our bill, and discover our credit has evaporated overnight since there really is no so-called privacy!
Our bank account is attached/frozen, no matter how many checks were written and are outstanding. They will levy all savings and all investments. Bankruptcy no longer stops them. Our salary and our spouse's salary will be garnered. They will obtain a writ and seize our safety deposit box, even our irreplaceable family heirlooms.
They will eventually grab our IRA or other retirement accounts and the cash surrender value of our life insurance policies. Without notice, our real property and liquid personal property could be sold with no minimum bid. If that doesn't pay the bill, they will seek to levy our pensions. When we pass on, they'll come after our estate! The elderly, in particular, are beginning to realize that what they once considered assets are now in fact liabilities, especially when it comes time to participate in so-called medical and retirement benefits.
Do it now! While it remains legal to own an Offshore trust!
The rich have been using Offshore Trusts for years to shelter their incomes and other resources. That's how they've managed to pay little or no taxes. Now it's your turn - and now it's affordable.
Surely there are other ways to secure a trust?
Indeed! However, the same Offshore Trust would cost you in excess of $1500 if you set it up yourself with the same Trustee in Belize and more if you set it up through your own legal advisor or Company Foundation agent.
Your Major International Credit Card will be issued with a $500 CREDIT LIMIT as soon as $1000 is transferred into your trust account.
The credit limit may be increased at your discretion by transferring additional funds into your account. The credit card may be used anywhere in the world. It is completely confidential and no social security number or credit information is required.
There is no reporting, and your bills can be directed to and paid by your trust. Therefore no interest is charged and there is no paper trail.