Factors to Consider When Opting For An Offshore Trust

May 16, 2011 - PRLog -- Many countries outside the United States recognize and support financial privacy as a vital right of their citizens. Offshore trusts are popular for associated legal impunity such as no recognition of foreign judgments, provisions of limited time frame to make claims, etc. As a result, offshore asset protection trusts, along with being used for asset protection are also in use for achieving tax savings. However, you must carefully evaluate an offshore trust jurisdiction and seek expert advice so as to ensure maximum benefits. Following are the factors to check in any offshore trust jurisdiction:

1.You must ensure that the country’s trust jurisdiction does not award foreign judgments made against assets transferred to a valid trust under its own jurisdiction. However, the exceptions of assets derived from criminal activity or fraud should be included. According to (http://www.rjmintz.com/types-of-trusts/overview/)estate planning attorney, jurisdictions with strong asset protection laws are ideal to formulate trust in.

2.The country should be politically and economically stable even if it has enacted favorable offshore trust laws. An economically or politically unstable country secures fewer chances for assets fortification. At the same time, an underdeveloped or inefficient financial & legal infrastructure is characterized with fewer banks, trustees and lawyers to choose from. As a result, the limited number of choices may turn up as a problem in the event of litigation.

3.The country’s jurisdiction should allow settling irrevocable trust i.e. the settler should be able to maintain the powers associated with ownership of the trust and trust’s property.

4.The country’s jurisdiction must enable incorporating “spendthrift” provisions that define that the creditors of the beneficiaries are unable to reach the trust assets.

5.Choosing between overseas territories and independent nations. Few estate planning attorneys advise avoiding jurisdictions that are not sovereign nations. This is due to the fact that territories are associated with a particular country’s jurisdiction that may not be conducive to your requirements.

6.And finally, since no offshore trust is a panacea; problems arise if you try to retain excessive control over your trust or when you settle the trust after you incur a liability. In situation like these, there are chances that the country’s court may find you in contempt and assign you punishment (monetary, jail-term or both) until you repatriate the trust’s assets in your creditor’s benefits. In addition to this, an offshore trust cannot reduce your liabilities, so, you should not count on them to high assets.

Robert J. Mintz, is a practicing attorney in San Diego, California, and a nationally recognized as asset (http://www.rjmintz.com/types-of-trusts/overview/)san diego estate planning attorney,estate planning attorney and tax planning.

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Robert J. Mintz, is a practicing attorney in San Diego, California, and a nationally recognized as asset san diego estate planning attorney,estate planning attorney and tax planning.