What about Trusts?

GrumpyMess

Trusted Member
Business Angel
Are the trusts a good solution right now for the asset protection? Do they perform better than a simple offshore company with nominees?

For example I setup a trust being a single beneficiary. Then a trust earns some income, which I don't receive yet. Can the state make some legal claims or seize these trust assets?
 

Sols

Trusted Member
Business Angel
With companies, there are fairly well defined legal standards. It's relatively easy to speak about what will and won't, and can and can't, happen with a company. Trusts are fundamentally different. They are tailor-made to your situation. Often re-using a previous baseline, but the idea of a trust is to make it fit your situation, requirements, and expectations.

In general terms, trusts work fine. But it has to be set up correctly, compliant with all applicable laws.

Speak with a lawyer.
 

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
This would require a very long answer as there are many factors in play namely your jurisdiction and local laws towards trusts, the trusts jurisdiction and the assets held etc to name just a few. It requires as said a specialist trust lawyer. You may find in the end that a trust is not useful in your jurisdiction and a Foundation may be more suitable.
 

GrumpyMess

Trusted Member
Business Angel
namely your jurisdiction and local laws towards trusts
The question is whether trusts or foundations will be able to protect my assets regardless of my current or future jurisdictions.

Let's imagine the following situation. I create a trust(foundation) in Guernsey with a bank account in the same place or in Switzerland, then a trust earns some income, which I don't receive. After 5 years country A, B or any other, wants to seize some of my assets. They know I have a trust. As far as I understand, whatever laws are in these countries decision will be made by Switzerland and Guernsey, right? So these countries will refuse any orders since I am just a potential beneficial owner but don't own these assets, right?

Is the same with an offshore corp with nominees? As far as I understand, no, since there are CFC rules.
 

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
The question is whether trusts or foundations will be able to protect my assets regardless of my current or future jurisdictions.
You need a crystal ball then not a trust.

They know I have a trust. As far as I understand, whatever laws are in these countries decision will be made by Switzerland and Guernsey, right?
You abide by law of jurisdiction you are resident in period. If the government knows about trust and assets via CRS or other means and they want to seize those assets then Switzerland and Guernsey can play dumb all they like. Government will simply put a lien on you, confiscate other assets, litigate with Trustees and in worse case, bar your movement, financial access, jail or detain you until you hand over assets

So these countries will refuse any orders since I am just a potential beneficial owner but don't own these assets, right?
They can refuse and enter litigation with tax authority. However the country you are resident in will make life interesting for you.

So these countries will refuse any orders since I am just a potential beneficial owner but don't own these assets, right?
You need to examine which international cooperation agreements they are part of and have signed with your resident country outside CRS firstly.

No trustee gives a damn about a client any more when personal liability and their own personal freedom of movement could be at stake if things turn really sour. Furthermore Trustees in most cases insist that the trust is in compliance with local laws of beneficiary and settlor and in the trust deed can have it so that the trust is dissolved or deemed no longer valid to protect their own necks.
 

GrumpyMess

Trusted Member
Business Angel
You abide by law of jurisdiction you are resident in period. If the government knows about trust and assets via CRS or other means and they want to seize those assets then Switzerland and Guernsey can play dumb all they like.
As far as I understand a trust or a foundation has a substance separated from the beneficiary and settlor with a few exceptions. It makes no sense using them otherwise. The task is precisely to protect myself from any dumb laws present in the jurisdiction I am or will be resident.

Government will simply put a lien on you, confiscate other assets, litigate with Trustees and in worse case, bar your movement, financial access, jail or detain you until you hand over assets
You are the same skeptic as me, and that’s why I am looking for a bulletproof solution for the future. The governments have too much power nowadays and the only way to protect from the state lawlessness is to use the more powerfull state.

No trustee gives a damn about a client any more when personal liability and their own personal freedom of movement could be at stake if things turn really sour
Why a trustee in Guernsey has to worry about laws of another country if he is acting under the Guernsey laws? It's exactly what he receives the money for.
 

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
Why a trustee in Guernsey has to worry about laws of another country if he is acting under the Guernsey laws? It's exactly what he receives the money for.
That's what Swiss bankers thought when they acted legally under Swiss law concealing assets. Some are still wanted and refusing to leave Switzerland as they face arrest under international arrest warrants and others flew to US to face justice rather than be a fugitive for eternity. A trustee is no different. If you try and open a trust with a reputable trustee you will see the due diligence questions asked including written legal opinion from a lawyer. Times have changed they don't want to risk their freedom or tarnish their business name for a few bucks.

Also who you think pays the trusts legal fees in a legal challenge of the trust? It doesn't come out of the trustees pocket as they are not about to loose 6 figures plus in legal costs.
 
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