Trusts

Asset Protection Trust

A trust is a legal relationship whereby an individual (the “settlor”) transfers (usually by way of gift) his or her assets to the trust which is managed by trustees who hold the assets for the benefit of others (the “beneficiaries”) named by the settlor. The trustees are bound by the terms of the trust deed. Normally a “protector” is appointed by the “settlor” to protect his wishes; the protector cannot be a beneficiary. Trust legislation to govern trusts has been enacted in many common law jurisdictions, our specialist team can advise on the most appropriate jurisdiction. In most jurisdictions, providing that the beneficiaries are not resident in that jurisdiction, the trust will be free of local taxes. Although there are various types of trust, the most common type used for discussion here is an offshore discretionary asset protection trust. It should be noted that due to the anti- avoidance legislation in situe in many common law jurisdictions such as the UK, designed to prevent the benefit from tax avoidance mechanisms, residents of those jurisdictions do not generally benefit from establishing an offshore discretionary trust; however, for residents in other jurisdictions there can be significant benefits.

ASSETS TYPICALLY HELD BY AN OFFSHORE DISCRETIONARY TRUST:

  • Shares
  • Investments
  • Life assurance policies issued on the life of the settlor
  • Property and real estate
  • Intellectual property

ADVANTAGES OF AN OFFSHORE DISCRETIONARY TRUST:

  • Confidentiality
  • Asset and wealth protection
  • Provision for beneficiaries
  • Recognised in law
  • International tax planning
  • Inheritance and estate tax planning

AN OFFSHORE DISCRETIONARY TRUST IS A BENEFIT FOR:

  • Successful International tax planning
  • Preservation of wealth against political, family or economic uncertainty
  • Consolidation of the ownership of assets
  • Maximizing benefits of assets for beneficiaries