The Benefits Of An Offshore Family Trust – The Asset Protection Alternative To A Will


The difference between a trust and a will, are often confused.

It’s certainly more time consuming and also additional costs involved, to have a family trust established, compared to a will. But there are significant advantages to trusts in many cases, and especially the benefits of an offshore family trust can be a determining factor in what you do.

How It Works

For the most part, a family trust works like a trust usually does. It’s a legally binding document that can own assets, and then terms are specified on how those assets can be distributed to beneficiaries.

The individual preparing the trust called the settlor or grantor, transfers his or her assets to the trust, which means that person is no longer a direct owner of those investments. These assets are then available to benefit the beneficiaries, which can receive distributions according to how the trust is written.

Another person known as the trustee, is the official manager of the trust. Even though the settlor can still retain control over the assets. You can learn more about how a trust works here.

The Benefits Of An Offshore Family Trust - The Alternative To A Will - Infographic

Going Offshore

You have two main ways of setting up a trust. One of your choices is to use a domestic structure (if your country allows for trusts to be formed), or to go offshore.

For a lot of people, it can feel safer to do everything within your home country, because you perceive it as very familiar. The problem however, is that especially domestic US trusts, they don’t work for asset protection. In case of a lawsuit, a trust based in the United States, has no real protection of assets. This can be important to consider, if you actually want any wealth to remain for your family.

A lawsuit can always happen, even if you never expected it.

Main Benefits

  • Avoidance of probate – When the settlor dies, probate court can be avoided completely, which is a significant benefit compared to a will. After the settlor’s death, the trustee can quite simply transfer ownership of the assets directly to the beneficiaries named in the trust.
  • Asset protection –  A properly structured trust (especially if it’s offshore) can be immune to almost any kind of legal attack. On the other hand, a will doesn’t have this feature. Because no one is the actual owner of the trust assets, until they have been distributed.
  • Limited taxation – Depending on where the people involved in the trust are tax resident, you can limit exposure to taxation, upon the death of the settlor.
  • Control – The trustee must follow all instructions of the trust, otherwise there will be legal consequences for that person. A settlor can also have a high degree of  control, while being alive.


Related Posts

About The Author


Fredrik helps high net worth individuals with creating international asset protection strategies. To keep anything from currency, real estate, precious metals and any other kind of investment protected from an unexpected lawsuit.