OFFSHORE TRUSTS
Offshore Trusts and Asset Protection
Typical offshore trusts depend on privacy, and sometimes that is the only real protection. An Offshore or Foreign Asset Protection Trust is usually established in a country that has no reciprocal judgment agreement with the U.S. and does not impose many or any taxes on trusts created there. That does NOT mean that you are in compliance with U.S. law, nor does it mean you are "innocent" if discovered.
Usually, a trustee is named that is not a U.S. citizen or a trust company with no U.S. offices, connections or affiliation in the U.S. This is NOT do-it-yourself territory, or something your general practice attorney can handle. Do NOT depend on "Pure Trusts", trusts with "bearer shares", "units", or "certificates".
Generally, an Offshore Asset Protection Trust will provide for added protections through trust advisors or nomonee directors. These roles are filled by individuals who might not be perceived to be under the Settlor’s control, who have independent powers in the administration and protection of the trust and its assets, and are not beneficiaries of the trust.
An important decision in the formation and administration of an offshore trust is the proper selection of a trustee. The offshore trustee can be a bank, trust company or professional trustee in another country. Generally, an Offshore Trust Plan works most effectively when the trustee is a professional who is knowledgeable, readily available, knowingly reliable, and most importantly, willing to defend the offshore trust against attacks initiated by creditors.
When properly established, an Offshore Trust will protect you and your estate from future creditors by creating sufficient roadblocks that discourage creditors from pursuing legal action.
Doing business offshore can be complicated from a legal and tax standpoint, but it can be very profitable and practical to manage. Choose wisely and stay with experienced planners and trust advisors when setting up and maintaining your offshore asset protection structure.
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