A trust is typically recognized through a written legal document known as a Trust Deed.
When a trust is formed, the initial owner (the Settler) of the assets places personal cash, property, or any other form of assets into a trust to be managed by a trust bank, company, or individual (the Trustee).
The trustee manages the assets in order to bring about financial benefits for the person who is named in the Trust Deed (the Beneficiaries).
A trust can be found in the settler’s native country or offshore.
A trust can be formed, signed, or administered in any location of the world, granted the jurisdiction where the trust originates acknowledges the legal concept of the trust.
“Offshore” simply means that the trust is not located in the settler’s native country.
Hence, an offshore trust is any trust that originates and is to be managed by trustees located in a jurisdiction outside of the settler’s native country.
An offshore trust is a document drafted in compliance with foreign law where the trustee, who is typically not located in the same country as the settler, holds assets to benefit the beneficiary.
An offshore trust can be the most effective component in an asset protection plan.
One of the primary benefits of establishing an offshore trust is to avoid inheritance tax in the settler’s native country.
Another benefit of offshore trusts is to legally protect the settler’s possessions from bankruptcy, litigation, or confiscation.
Offshore trusts also allow settlers to take pleasure in privacy as to the nature of their investments as well as to who their beneficiaries are.
Offshore trusts provide a source of asset protection to those settlers who live in unstable countries.