Offshore Bank Information

Offshore Trust and asset protection benefits



An offshore trust is very much like a traditional trust in that it comprises a relationship or arrangement entered into by a person or group designated to be the “Trustee,” and a distinct person or group of people designated the “Settlor,” by which provisions are made in a binding, written legal form known as the “Trust Deed,” in order to hold title to assets and property, to manage said assets in accordance with the trust deed, in order to provide a series of benefits and distributions to a person or group of persons designated the “Beneficiaries.”

The trustee and/or the trust company charged with the management of the trust are bound by a fiduciary duty o uphold the agreement, and they agree to the rules and requirements set out by the trust deed. A trust is neither fish nor fowl, and though attempts at describing a trust often likens them to a corporation or foundation, they are unlike either; they are a trusting arrangement, supported by a binding written agreement, to provide for the benefit of the beneficiaries.

Once the decision to form the trust is reached, the settlor must then select the type of trust he wishes to form, its duration, and make important decisions on defining details. These details include deciding whether the trust is revocable or not, whether the trust will be discretionary or not, and to specify the rights, duties, obligations, and expectations of the trustee.

With respect to the revocable or irrevocable trusts, much as their names imply, they can either be revoked at any time with the terms for this outlined by the settlor, or they can have a pre-determined lifespan with no provisions for revocability, and only concluding when the terms of its creation as specified in the trust deed are met.

By contrast, a discretionary trust can fall under either category, and is defined as a trust with much built-in flexibility with respect to how the trustee handles distributions to beneficiaries, and even provides, in some instances, the trustee with rights to appoint or add beneficiaries. This relinquishes a lot of authority over the Offshore trust to a trustee, however, and highlights the importance of the careful selection of a competent, well-reputed trustee or trust holding company with good references, a worthy reputation, and the experience necessary to successfully and faithfully fulfill and honor the terms of the trust.