The most widely used vehicle for asset protection is the Trust. A Trust is able to hold a variety of assets including immovable assets, stocks and shares, investment products, real and intellectual property, bank deposits and life insurance policies.
An offshore trust is created when assets are transferred to a trustee. The trustee becomes the legal owner and is responsible for managing the assets and distributing them to the beneficiaries of the offshore trust (which could include the person or corporation which transferred the assets to the trustees) in accordance with the terms of the trust deed.
The terms on which the trustees administer the trust assets are detailed in a trust deed and trust legislation to govern trusts has been enacted in many common law jurisdictions.
- Shares and stocks in both quoted and unquoted companies
- Investment portfolios
- Real and intellectual property
- Bank deposits
- Life assurance policies issued on the life of the Settlor
- Most other types of asset
- Privacy relationship, for example, in the Isle of Man offshore trust deeds are not publicly registered
- Wealth protection
- Tailored to specific family requirements
- Recognised in all common law jurisdictions
- Increasing recognition in important civil law jurisdictions
- An important tool in international income, capital gains and estate tax planning
- Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements
- Want to preserve their wealth against uncertainty, political, economic or family
- Want to transfer wealth to their heirs in a tax-efficient manner
- Want to plan their estate to maximize the benefits of their wealth for family members and others
- Want to transfer wealth to their heirs in accordance with their wishes and not in accordance with the laws of the country where they live
- Want to consolidate the ownership of assets owned throughout the world in one location
- Want centralised reporting
- Want to minimise or eliminate estate taxes arising on the death of the settlor
When a trust is established in a suitable offshore jurisdiction, provided that residents of the offshore jurisdiction are excluded from receiving benefit from the offshore trust, then there will be no local taxes applicable to the assets and income of the trust.
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