Predatory Litigation, or Creditor Concerns? Controlling Your Trust
If you are in a situation where predators are putting your finances at risk, there are options you can take, even last minute, to counter any unexpected or vicious attacks.
Putting You In Control Choosing the best offshore jurisdiction, be it for offshore trusts or offshore banking, can be a painstaking process, and it’s easy to be led astray as each jurisdiction competes for your custom. There’s a lot of legwork involved, and every lawyer, every banker, every service provider, they’ll all tell you their jurisdiction is best because it’s the only one they’re selling. So, instead of catering to your needs, they will try to distract you from that fact with a whole lot of razzle-dazzle.
Like a giant pinball table, we’ve seen too many people get attracted by all the flashing lights and noises only to realise later they’re not the player but the ball, constantly being bounced around the place without any real control over the game.
If you have concerns about a particular creditor using predatory litigation or, indeed, fears of government agencies targeting your wealth, you can employ trusts in offshore jurisdictions (examples listed below, recently discussed in our article __) to help safeguard your assets.
The Cayman Islands
The Cook Islands
Saint Kitts And Nevis
The Bahamas
Belize
British Virgin Islands
It should be noted that, as with offshore accounts, foreign trust reporting rules may apply. For example, if you are a US citizen, you need to take particular care in this case.Incorrect structuring can result in unwanted legal and/or financial penalties, so don’t take the risk. Instead, we suggest you to get in touch with us to ensure things are done in a proper, legally compliant fashion, through our verified partnered network of analysts, advisors, and conduits.
Factors to Consider: A Self-Settled Trust and Irrevocable Trust
A self-settled trust, also known as a spendthrift trust, is a trust whereby the settlor and the beneficiary can be the same individual. Assets are then managed by the trustee on that individual’s behalf. Only allowed in a small number of states globally, the assets tend to remain permanently in the trust and controlled by the trustee which keeps the assets from the reach of most creditors.
Factors to Consider: An Irrevocable Trust
An irrevocable trust is a type of trust whereby once the agreement is established no changes can be made to the trust without the consent of the beneficiary. This kind of trust specifically focuses on the ability to act as a type of legal and financial relationship in which one person (the grantor) gives another (the trustee) the right to hold title to property or assets for the benefit of a third party (the beneficiary). An irrevocable trust provides a greater degree of control, allowing you to specify how and when assets will be distributed to your beneficiaries. As a result, you can enjoy peace of mind that your beneficiaries will use the assets as you intend.
Irrevocable trusts also can help shield your assets. Transferring certain assets to an irrevocable trust can remove them from your taxable estate and protect them from creditor claims. They are also helpful for individuals who need to shelter income and assets so they don’t exceed limits on government benefits like Medicaid and Supplemental Security Income.
In addition, irrevocable trusts can be used for multi-generational planning, helping you build and maintain wealth for future generations of your family. Irrevocable trusts do have some restrictions. As the name suggests, an irrevocable trust is one that can’t be changed—at least, not easily. While Texas and most jurisdictions allows irrevocable trusts to be reformed, modified, or decanted thanks to the advent of the “trust protector,” this process is not always simple or straightforward.
