The Benefits Of Establishing An Offshore Trust
by Fulton Abraham Sanchez, CPA · Published · Updated
While the tax advantages of using offshore trusts are limited, they can still play a key role in estate and financial planning to help you preserve and enhance your wealth. You may benefit from using an offshore trust: If you have assets in various locations throughout the world an offshore trust can help you distribute assets with the tax effects, either during your lifetime or through your will.
How offshore trusts work?
An offshore trust is established under the laws of another country and is administered by an offshore trustee, typically a financial institution. An offshore trust has a settlor, a trustee, and beneficiaries. If you are the settlor of the trust, you will fund the trust either by giving or lending property to it.
A trust is separate from you and your beneficiaries, and is governed by the laws of the country in which the trustee is resident. The trustee becomes the legal owner of the trust property and is required to manage the property as directed in the trust deed.
The trustee is also responsible for distributing trust assets to the beneficiaries you have named in the trust deed. The trustee has full decision-making power over trust assets based on the provisions of the trust deed, and it is essential that you have complete confidence in your choice of trustee. To maximize their effectiveness, offshore trusts are generally established in jurisdictions with little or no income, capital gains, or estate taxes, such as Belize, Barbados, the Bahamas, Cayman Islands, and Turk and Caicos.
Those countries have local and international financial institutions that are experienced in acting as trustees, and have the legal and regulatory systems designed to manage offshore trusts. And By the way You can use the offshore trust for example to facilitate the smooth transfer of wealth from you to your dependents while you are alive or after your death.
Fulton Abraham Sanchez, the founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant specializing in Offshore and International business. You can reach him at email@example.com.
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