Understanding Offshore Trusts

If you are considering asset protection planning, you may be wondering if an offshore trust would be beneficial to you. An offshore trust is similar to a typical trust created in the United States, with the settlor and beneficiary being the same person. The most commonly used jurisdictions for offshore trusts include the Cook Islands, Nevis, Bermuda and the Cayman Islands.

The most important decision in creating an offshore asset protection trust is selecting the trustee. The trustee should be an individual who is not a U.S. citizen or a trust company that has no affiliation with the U.S. Most offshore trusts have trust advisors who are not under the settlor’s control, but have the authority to step in to protect the trust assets. In fact, an offshore trust is the most effective if the settlor is willing to relinquish control over the trust and all parties to the trust, except the settlor, are outside the jurisdiction of the U.S. Thus, it is imperative to select an offshore trust plan with a trustee that is professional, trustworthy, and willing to defend the trust against creditor attacks.

The use of an offshore trust is probably the most effective asset protection strategy, but it is one that should be used cautiously and it is an expensive solution. This type of trust is not used for purposes of reducing or avoiding U.S. income taxes. In fact, there are very stringent rules about tax reporting that must be complied with if you have an offshore trust. If you fail to properly report you can incur substantial fines and penalties. If you are interested in creating an offshore trust, it is essential to work with a knowledgeable and experienced attorney that can assist you with finding the right offshore parties to partner with in establishing the trust. We have assisted clients in offshore trust planning and have relationships with offshore trustees and advisors.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.