Setting up an Offshore Trust with EFSAG
EFSAG can assist you every step of the way with setting up an offshore trust in a jurisdiction that offers you complete and comprehensive asset protection. Whether you are an individual or corporate entity, we can provide you with a tailor-made solution to suit your asset protection needs.
Select from our available jurisdictions to learn more:
Why form an Offshore Trust?
An offshore trust is a highly regarded asset protection tool that allows for the personal wealth of an individual to be transferred into an agreement which removes all legal entitlement from the settlor to the trustee. A trust is managed by a trustee in compliance with the settlor’s wishes, as outlined in a trust deed.
It can provide an effective tax planning solution, as most offshore jurisdictions allow trusts to be fully exempt from tax. They can also provide a highly confidential and secure manner in which to settle one’s assets for the effective planning of their estate.
Your reasons for creating a trust will affect how it is created. For example an ‘inter vivos’ trust will be administered while the settlor is still alive, whilst a ‘spendthrift’ trust comes into force upon the death of the settlor.
Generally speaking, an offshore trust is sought by high net worth individuals for the protection of inheritance property for their children and future generations. Many high net worth individuals seek anonymity with regards to the disclosure of their identity and value of their assets, and most offshore jurisdictions enforce strict confidentiality laws that protect both the settlor of the trust and its nominated beneficiaries.
Creating an offshore trust is also an excellent form of asset protection from creditors, as assets placed here cannot be seized. It provides a secure haven for managing ones personal wealth, as forced heirship rules are unenforceable and potential inheritors cannot make claims against trust property. Furthermore, protection is ensured against outside threats in ones domicile state, such as instable governments and poorly regulated financial centers.
Who would benefit from creating an Offshore Trust
Trusts are primarily used by high net worth individuals seeking to safeguard their assets for future generations. Nevertheless, any individual can create one, and in many jurisdictions there is no minimum capital required to establish an offshore trust or foundation. There are many people who may need to form a trust and will benefit extensively from the formation. Such benefits of trusts include, but are not limited to:
- Asset protection of ones personal property and management of ones estate
- Inheritance planning enabling freedom to distribute ones personal wealth to whoever he chooses and not by what heirship rules dictate
- Children’s benefits
- Employee benefits
Offshore trusts are typically required by people who want to preserve their wealth against instable governments within their country of domicile, from outside creditors and forced heirship rules.
Main uses and benefits of an Offshore Trust
An offshore trust is a highly resourceful and profitable way to manages ones assets. There are many benefits to creating one, including, but not limited to:
- Effective asset protection
- Avoidance of forced heirship rules
- An excellent tool for estate planning
- Freedom to choose whoever he wants to distribute wealth and how much
- The aversion of claims from creditors, unless they can prove ‘beyond all reasonable doubt’ that the trust is fraudulent
- A centralized and efficient way to monitor and control assets for future generations
- Strict privacy controls
- High levels of anonymity for both the settlor and beneficiaries
- An excellent tax planning solution
- Allows for the avoidance of inheritance tax for beneficiaries
How an Offshore Trust is created
An offshore trust can be established by form of oral or written instrument, however the safest option when creating is to provide a written document.
The main parties involved in the formation of a trust include the ‘settlor’, ‘trustee’, ‘beneficiary’ and ‘protector’. A settlor is the individual who transfers his wealth into the trust for the administration and maintenance of the nominated trustee. The trustee must carry out all the commandments as laid down in the trust deed, which are set out at the request of the settlor. The beneficiary is the person who will benefit directly from the trust, while the protector has a duty to ensure the trustee is compliant with the trust deed.
The choice of jurisdiction is imperative to meeting the needs of the settlor. Certain jurisdictions may or may not be able to provide specific requirements of the settlor. For example, some jurisdictions require the trust to be registered with a financial services authority and this may put potential offshore investors off due to the desire to remain anonymous.
To see how EFSAG can assist you, speak to a member of our team by completing our online Contact Form.