Setting up an Offshore Trust
Trusts are used by wealthy families and individuals to protect their hard-earned wealth. They are also effective for tax and estate planning purposes. Following are just some of the advantages of placing assets into a trust
Trust Creation made simple
A trust is created when an individual (called the “Settlor”) transfers assets to trustees (who can be either individuals or a Corporate entity licensed to act as such) to be managed by them for the benefit of selected Beneficiaries. The relationship is governed by a legal document called a Trust Deed. The terms of this document will be negotiated between the Settlor and the Trustees. Should the Settlor not wish to be named in the deed, the Trustees may simply prepare a Declaration of Trust. The identity of the Settlor will be concealed and can only be released in certain limited circumstances.
1. Eliminate or Reduce tax
Subject to anti-avoidance provisions in the Settlor’s home jurisdiction and other personal circumstances, significant immediate or future tax savings can be achieved as a result of placing assets in offshore trusts.
2. Asset Protection
Subject to certain requirements, Trusts may be registered as Asset Protection Trusts to enable assets to be protected from creditors or in the event of a bankruptcy. Gibraltar also has specific Asset Protection Trusts – please ask us for more information.
3. Provide Continuity to a Family Business
A trading company placed within a trust will already have suitable trustees who are able to oversee its activities and ensure that the company continues to trade successfully and provide ongoing income and opportunity to future beneficiaries. lt will also allow the trustees to guide future generations who will manage and run the business, thereby providing continuity into the next generation.
4. Avoid Probate
Assets that are placed in a trust will avoid going through the lengthy process of probate as they will already have been legally transferred to the trustees during the Settlor’s lifetime and will pass to the beneficiaries as per the terms of the trust.
5. Avoid Dissipation of Assets
Assets placed in a trust will prevent a young beneficiary from dissipating them until such time as the trustees feel he or she is responsible enough to handle large sums or significant property.