Trust: Your Ultimate Asset Protection Structure 

Why do people set up trusts? Well, this is an indispensable instrument in the present-day world if you want to protect your assets. Swindlers, creditors, relatives, or any organization may want to lay hands on your wealth, but you have an absolutely lawful instrument to prevent this from happening. All you need to do is to properly form a trust in a well-suited jurisdiction and enjoy enhanced protection.

When you decide to set up a trust, you usually have the reasons why you do it. And the main thing is to select a jurisdiction with laws that will support your goals. Another thing to pay attention to is the laws of your country related to trusts that you (as a trust owner) will need to comply with.

Reasons to establish an offshore trust

A trust is actually an organization whose primary goal is to govern different legal entities, funds, or real estate in your possession. Trust founders/beneficiaries focus on asset protection, and they get it. Here are the main reasons why people choose to establish a trust (which influence the choice of jurisdiction for this purpose):

  • Inheritance management and restricting the access of relatives that are prone to excess spending
  • Distributing the capital among family members considering the possibility of divorce or any disputes arising over the course of time
  • Putting some wealth aside for a rainy day when you may face bankruptcy or lawsuits filed by your creditors
  • Using the possibility to pay fewer taxes on your inheritance or lower income tax payable by an international business corporation that you run

Please read more on the best offshore trust jurisdictions to choose and remember that you should carefully study the legislation on trusts in your country of residence and the laws in the jurisdiction you selected to register a trust to make your structure as efficient as possible. If it seems too much work to do, you can follow the link above and use the help of a qualified expert in the field.

Want to choose the best jurisdiction for your trust?

You don’t need just a trust formed in any place in the world: what you really need is a structure that would realize your top priorities in the best way possible. And the main thing you can do is to choose a suitable jurisdiction.

Let’s look at the main factors to be taken into consideration to make the right choice:

  • Write down the main purposes why you want to set up and trust and check whether the laws of the jurisdiction you have selected can help you achieve them.
  • Think of the assets you are going to transfer to your trust (these may include funds, legal entities, objects of art, real estate, and so on). Keep in mind that real estate objects are covered by the laws of the country where they are located rather than by those of the jurisdiction where the trust has been set up.
  • Estimate the total value of the property you are going to put under the protection of your trust as this will also help to shortlist the best options.
  • Is there any chance of any third party filing a lawsuit against you? There are jurisdictions that protect you from the courts in your country of residence particularly well. A good example here is Belize which is the best choice for US citizens: its laws governing trusts are specially adapted to American tax policies.
  • You might have accounts with certain banks and this will also influence the choice of a well-suited jurisdiction.

On the whole, we strongly recommend that you book a session with a consultant (you can do so by following the links in this article) to discuss all the matters above and make a well-informed choice. A consultant knows, for instance, that the best option for those that need enhanced protection from creditors is Nevis or Belize as the courts in these jurisdictions do not recognize the decisions made by foreign courts. 

Read the full text of our article on trust business structure advantages and disadvantages.

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Trusts: the risks you may face

The choice of the right jurisdiction is so crucial because you may be completely dissatisfied with the conditions for trust formation offered by countries that practice Common Law, for example, such as the UK and the US. 

Here are the disadvantages potentially faced by trusts formed in these countries:

  • Trusts are regulated by the laws of the country where they are formed. The jurisdictions like the UK and the US allow for trust assets to be seized following a court decision. If a creditor takes action or the trust settlor goes bankrupt, this is almost inevitable. However, jurisdictions like Nevis will keep your assets safe.
  • You no longer legally own the property if you transferred it to an irrevocable trust. Who knows what may happen in life? You may well regret this decision afterward.
  • Sometimes the trust settlor and the trust beneficiary are required by laws to be different persons, otherwise the settlor is considered the owner of the assets and is not covered by the trust laws.

If you opt for Nevis or Belize, you choose a legal firm to be your trustee and face none of these disadvantages.

Trusts: main benefits

Here are the advantages you can get by forming a trust in a proper jurisdiction:

  • The assets transferred to the trust and your identity will be kept secret.
  • Trust is a very good alternative to the will.
  • You will enjoy enhanced property protection from creditors and decisions of foreign courts.
  • Your relatives and ex-spouses will not get to your assets.
  • The trust can be used to accumulate capital.

You can follow the link above to read more details.

If you think trust is a good idea, please contact us using one of the above links, and our seasoned experts will help you with hassle-free trust set-up in a jurisdiction they will hand-pick for you. Do not hesitate to ask any questions you may have. We will be happy to share all the information we have with you to help you make the final decision.

Get in touch today!