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offshore solutions since 1988

T R U S T

The concept of a "trust" is unique to "common law" or English speaking jurisdictions. Historically, it developed from English laws of equity and sought to separate the creator of the trust, known as the Settlor, from specified real or personal property usually for the benefit of future heirs and/or to ensure that any future dispositions would be made in a manner generally in keeping with the original intentions of the Settlor. Once the Settlor has decided what property he wishes to transfer to the hypothet trust (normally a complex written document) he must decide upon its administrators, the "Trustees". It is vital to understand that these must have full autonomy to independently manage and control the transferred property in favour of either known or unknown beneficiaries or for a specific purpose. If full autonomy is not granted then it could be claimed that the trust was not settled and therefore, was not properly constituted. If this happened then Settlor would still be legally deemed the owner of the trust assests - defeating the raison d' être behind the trust in the first place.

 Its statutory characteristics embody the common law principles relating to trusts, including:

1. Separation of the trust fund from the trustee's estate;
2. Title to the assets being vested in the trustee;
3. Fiduciary duties and powers of the trustee; and
4. Trustee accountability for the management and administration of assets of the trust.

The "trust property" can include anything which is capable of being transferred such as land, money or shares including the shares of offshore companies.

The development of the modern trust has been proven without doubt to be an effective instrument used by the offshore practitioner in asset protection and financial planning in an increasingly complex society where individuals have seen their rights to financial privacy diminished year by year. One the great benefits of a trust is that it distinguishes and separates the legal possession of property, the legal interest of that property and the equitable interest in property. The legal title is vested in the trustee and the equitable interest in the beneficiaries. It also enforces rights of use and enjoyment of that property in addition to the preservation of confidentiality. This makes the trust an extremely powerful, flexible and sophisticated tool for asset protection, tax strategies, and for both estate and investment planning, especially when established offshore.

For anyone wishing to protect their assets from future creditors and retain a significant beneficial interest in those assets should consider the many advantages of the offshore trust.

ELEMENTS OF A TRUST

The Trust Document - The Deed of Declaration or The Deed of Trust is a written legal agreement, which details the duties and responsibilities of the Trustees, the Beneficiaries names and lists the Trust Properties.

The Settlor or Grantor - The person, corporation or other entities placing the property into a trust. The Settlor creates the trust, appoints the trustees and determines who is to be the beneficiaries and in what circumstance. Once the property has been transferred into the trust the Settlor must not have direct access or control of those assets.

The Trustees - The individual, corporation, other trusts or other entities legally appointed to receive the trust property to be managed in accordance with the terms of the Trust Deed for the benefit of the named beneficiaries. The obligation of the trustee is legally enforceable and he must exercise his trust powers for the benefit of the beneficiaries, and not put himself in a position where his duties as a trustee conflict with his personal interests.

The Beneficiaries - The person, corporation, other trusts or other entities entitled to the benefits of the property placed into the Trust. Their interest in the Trust Property will vary and is subject to the terms set out in the Trust Deed.

The Protector - An additional party appointed to the trust where it is considered that a guardian over the Trustee is needed. The protector's powers are set out in the trust deed. Usually, for any actions of the trustees in dealing with the assets of the trust requires the protector's permission. The protector is usually empowered to remove and appoint trustees. More than one individual can be appointed to act as joint protectors.   

 

 

 

THE USES OF OFFSHORE TRUSTS

The wealthy have used the trust approach for many years. There are numerous ways to use an offshore trusts seriously and effectively. It depends on your individual needs and your situations. Some of the uses are:

         As a tax-planning tool - Because the settlor gives up legal ownership of the assets it may be possible to avoid or defer capital or gift taxes, death duties, high income tax rates, etc.

         Asset protection - The risks of holding assets in highly volatile and politically unstable areas of the world (including the introduction of exchange control regulations and the "freezing" of assets held in those areas) can be avoided. It is essential that the trust is set up when there were no claims or potential claims known to the settlor this would enable you to protect personal assets from creditors, professional negligence, divorce settlement, product liability and similar claims legally.

         Substitutes for a will - Some countries have punitive legislation dictating the manner of wealth distribution on the death of the owner. If the legal requirements conflict with the wishes of the owner of those assets fixed succession or forced heirship rules of those countries can be avoided by the transfer assets into an offshore trust.

         Make a secret provision - Provision can be made, for example, for an out-of-wedlock child, for charitable causes or even a lover.

         To establish a mutual (or Unit Trust) fund -The trustee can buy holdings in several companies and invite the public to buy "units" or shares in the trust fund.

         Preservation of family wealth - Assets can be set aside for the future benefit of family members while restricting the beneficiaries' access, until such a time that it is appropriate that those assets be distributed. For example, when a child becomes of age to hold title to property or to protect the assets from being dissipated by a young wayward family member.

         Confidentiality of financial affairs - There is no requirement to register or record Trust Deeds with any authorities in many offshore jurisdictions. Avoiding any entry in the public records.

         Avoiding Probate - If you are from a civil law country with forced heirship requirements, a trust can keep assets out of the local probate system, since the trust and its assets are governed by the laws of the country in which the trust is located. Trusts especially if established for several years, is less likely to be challenged legally compared to a will, which may be more easily contested during probate. The trust is an obvious defense to the charge of mental incompetence often used to attack the validity of a will, especially ones written late in life.

 

TYPES OF TRUST

A pure trust is one in which three parties of the trust, Settlor, First Trustee & Beneficiary are, in fact, three separate entities. These three entities then become one entity in itself through the creation of the trust. What makes this pure trust such a powerful instrument is that it is written under common law as a pure trust. There's no other structure that exists which is more powerful and more flexible for personal or business purposes, written under common law. Trust can be divided into two main categories the, Fixed and Discretionary Trusts, distinguished by the different ways in which the trustee pays out the income of the trust to the beneficiaries.

Fixed Trusts
The trustee of a fixed trust must pay the income of the trust (and ultimately distribute the capital) to the beneficiaries named in the trust deed and in the exact proportions specified in the trust deed. In other words, the trustee has no discretion as to the amount of income that is paid away or to whom it is paid. In such cases, the beneficiaries are said to have an "interest in possession" and trusts granting such interests are known as "Interest in Possession Trusts".

Discretionary Trusts
As the name suggests, the trustee is given certain discretionary powers regarding the distribution and/or allocation of the income (and ultimately the capital) to the beneficiaries. When establishing a discretionary trust, the settlor decides exactly how wide the powers of the trustee will be. These powers are set out in the trust deed. The trustee can be given absolute discretion as to which beneficiaries will benefit, to what extent and on what occasions. This absolute discretion to appoint, at some future time, beneficiaries not even named in the trust deed can be very useful when establishing a trust structure providing extra confidentiality.

Trusts often contain a mixture of fixed and discretionary elements. For example, a settlor may wish to "fix" an income for his widow but, on her death, give discretion to his trustee to provide for his children, grandchildren, etc.

MAKING THE OFFSHORE TRUST WORK FOR YOU

Families who have amassed great fortunes have recognised that the preservation of that fortune is more important than the accumulation of such wealth. With the increased financial risks, increased litigation and obscene jury verdicts in our changing economic climate, even the most financially sound and prudent executives has been convinced to turn to the old and proven asset protection strategies of the wealthy, the use of offshore trusts. With the development of tax havens the cost of establishing a trust makes it affordable to everyone, not just available for the rich and famous. You too can benefit from a trust.

Being one of the most flexible legal instruments available, the offshore trust can be used for almost any purpose, which is considered to be legal, or not against public policy. You can use it to conceal personal assets. As an individual you need to structure yourself legally and conduct personal and business matters in a discreet and safe manner. It would be wise to seek the guidance of an international asset protection attorney and act early while your legal situation is still stable, avoiding any complications later when you have amassed your wealth. This will protect your assets legally from future creditors or possible lawsuits. Remember, setting up a trust after the fact will not work. Properly establishing an Asset Protection Trust prior to any creditor claims will provide your desired protection. Also use legal, existing tax laws to structure your situation to take maximum advantage of the tax laws. Begin amassing a huge portfolio by obtaining significantly higher rates of return on your tax-free investments, much higher than in USA, Canada or Europe.

Once you have established your offshore trust it can be used to:

         Conduct a business;

         Hold title to and invest in real estate, cash, stocks, bonds, negotiable instruments and all sorts of personal property;

         Take care of minors or the elderly;

         Pay medical, educational or other expenses;

         Provide financial support in retirement, marriage or divorce;

         Assist in the execution of a premarital agreement; and

         Serve as a major avenue of avoidance for the muddle of probate and the burden of inheritance taxes.

In addition your trust can also be used for your international investment activities. Your offshore trustee would take care of the investments and paper work, while you make the recommendations. In this way, you benefit from the world's best investment opportunities, without worrying about boundaries or conflicting laws. With the use of a foreign trust in an offshore jurisdiction you are able to diversify your investments and assets international.

By establishing a trust in one of the more popular offshore jurisdictions you gain the added advantages of privacy, confidentiality, and reduced domestic reporting requirements in your home country, since the trust is the legal owner of the assets and not you.

When thinking about establishing an offshore trust there are number things that you should take into consideration:

         The laws relating to confidentiality and privacy

         Your present tax and legal situation

         Creditor protection

         Risk of future tax changes

         The mobility of the trust

         Offshore reporting requirement

         Government interference

         Political and economic stability of the host country

         The taxation laws relating to your trust

         Information sharing treaties with other countries

         Cost of establishment

         The host country's enforcement of Trustee obligations.

Whatever you wish to protect, your accumulated wealth from unforeseen creditors, avoid probate on the disposal of assets at death, avert the consequences of the future litigation, or to use a component in your overall personal financial planning, the asset protection trusts is a powerful tool which can assist in achieving these goals. We would be delighted to assist in establishing your offshore trust in your preferred jurisdiction. Trusts can be established within minutes, literally and assets can be settled after the trust is formed and established within the jurisdiction of your choice.

Setting up your Trusts & with Bank Account:

1.       You must first decide on the Trust Name.

2.       After careful consideration decide upon a suitable jurisdiction that will meet your objectives.

3.       Complete the application form email, fax or mail to us together with the appropriate remittance. Alternatively, you can fax the application form and wire us the funds to  giving the reference as your Trust Name. We will acknowledge receipt of your request within 3 working days.

4.       We will begin to establish your trust once we have received cleared funds in our bank account.

Should you also require our assistance opening an offshore trust account, you must provide the following documents:

1.       Copy of Certificate of Registration.
(
We will supply this document if it was requested to establish the trust).

2.       Notarised copy of passport, Birth Certificate or driver's licence with photograph for each authorised signature to the account.

3.       For each signature to the account a letter of reference from their present bank or recognised investment institute confirming their address, signature and that they have held the account with the bank for three or more years.

4.       A current utility or phone bill confirming residential address for each authorised signature to the account.

5.       Funds to deposit in the account (US$ 1,000.00 minimum depending on the bank and account type).

We will supply all the relevant documentation required and effect the introduction to the bank.

 

 


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