FAQ: What is a Foreign Asset Protection Trust?

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What is a Foreign Asset Protection Trust?

Foreign or offshore asset protection trusts are carefully designed trusts formed under the laws of an offshore jurisdiction to take advantage of specific provisions of the local statutes. Typically these provisions offer the trust, Settlor and Trustee a significantly higher level of flexibility, control, or privacy than a comparable domestic entity. The Cook Islands, Belize, and Nevis are very favorable jurisdictions for foreign trust legislation.

What is a Trust?

What is the purpose of an Asset Protection Trust?

Do we want a Foreign or Domestic Trust?

What is a Domestic Asset Protection Trust?

What is a Foreign Asset Protection Trust?

Are my life long accumulated assets susceptible to creditor attack?

How does an Asset Protection Trust operate?

Who manages or administers the trust and the trust funds?

Does an Asset Protection Plan make sense for me?

Tax Implications for Offshore Trusts

By now, you are familiar with the key concepts underscoring the need for asset protection. You know that there are many entities and structures that can be used to strengthen your defenses against creditors' attacks or, even better, reduce the likelihood of claims being raised at all. Indeed, offshore entities can provide significantly greater deterrence to creditors than their domestic counterparts. However, there is one creditor whose claim to your assets cannot be deterred and is inevitable: the Internal Revenue Service (IRS).

And while you know that certain domestic asset protection entities come with tax savings or tax liabilities, you might be inclined to believe that offshore entities immunize your assets from tax cons...

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