What Is a Trust

Trusts have the same structure, parameters and basic establishment procedure, whether they are set up offshore or in one’s native country. The Settlor, or person who sets up the trust, records the terms of the trust in a Deed. Within this Deed, the Settlor names the assets to be held in trust - possessions, property, cash, companies; who is to over see the administration of the trust, or the Trustee(s); and to whom the payments are distributed, i.e., the Beneficiary or Beneficiaries. Offshore trusts are arrangements wherein a trust is settled with an offshore institution where favorable secrecy and trust laws have been applied. However, there are some significant differences in terms of the benefits you receive from setting up an offshore trust:

Benefits of Offshore Trusts

  • Capital gains, inheritance and estate taxes can be avoided or greatly lessened by the establishment of an offshore trust. By doing so, you ensure your family, charity or other beneficiaries are properly looked after and able to enjoy the fruits of the trust’s assets.
  • The assets held in an offshore trust are completely protected from claims made to the Settlor’s or Beneficiary’s property. This includes a wide variety of action, such as:
        o Divorce settlements
        o Alimony claims
        o Bankruptcy
        o Civil seizures
        o Lawsuit compensation (damages, distress, negligence)
        o Creditors
  • Privacy is of great concern to many of our clients. The need for privacy surrounding one’s finances used to imply that one’s gains were less than above-board; today, that notion has completely been dismissed by respected corporations and titans of finance who have become increasingly mistrustful of non-offshore governments’ willingness to intrude on the privacy of individuals.
  • Offshore trusts are taken seriously by offshore jurisdictions in respect to oversight and proper conduct by those named Trustees. Offshore Trustee licenses are granted only to those individuals and entities that have proven themselves to be literally trustworthy.
  • In addition, there are documents, rules and regulations in place to further ensure that the Settlor continues to have the utmost confidence in the Trustee(s) in charge of the trust’s assets, including:
        o A confidentially agreed-upon Power of Attorney for the Settlor, for increased control over the trust.
        o The appointing of a trust guardian, who plays a supervisory role to the Trustees.
        o A Memorandum of Wishes, in which the Settlor further explains the parameters and other details of the trust.
  • There is a wide variety of assets that can be placed in an offshore trust, including but not limited to: art, physical property, cash, vehicles, marine vessels, real estate, and many more. For a complete list of eligible assets, or to ask about a particular asset, please contact us at your convenience.
  • In many “onshore” countries, the government will dictate exactly how, to whom and how much can be distributed to one’s heirs after their passing. Offshore trusts allow families to provide for their exact wishes when planning their estates.
  • Corporations choose to establish trusts in offshore jurisdictions for many reasons. For example, international companies consider offshore trusts an efficient and advantageous way to manage worldwide assets. With offshore trusts, a company’s officers can look to one source for financial reporting and information.

For more information on trusts, click here or contact us for detailed information about OBI’s trustee services.