The Difference Between A Domestic And Offshore Trust

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The meaning behind going offshore, is quite simply having a trust in a different country than where you live. But how can this actually benefit you, instead of setting up your trust domestically?

Most of the time, no country will recognize the courts of another country. Meaning if you have a creditor or someone who sues you in your home country, but your trust (and preferably your assets) located somewhere else, it’s very difficult for anyone to reach your investments.

Let’s say you are in the United States, and your trust is in Belize. The Belize government doesn’t recognize the US legal system, and therefore nothing will happen to your assets. The same applies to any other country. In some cases there are treaties in place, to make it easier for laws to be recognized internationally. But in those cases there will still be some kind of trial. Having a portable asset protection trust also helps, which allows you to move the trust to a different country, in case of a legal attack.

The Difference Between A Domestic And Offshore Trust - Infographic

It’s also important to keep in mind that you can’t transfer everything you own to a trust offshore, and then declare bankruptcy. The whole point of asset protection, is to have it in place as a last line of defense and safeguard, in case an unexpected lawsuit were to happen. It’s never ok to purposefully defraud your creditors, and then run away. For example if you still owe taxes and think a trust will help you protect your money, that is not true and is not going to work.

There are laws in place, in pretty much every country, which prohibits you from doing anything like that. The only good time to do asset protection, is when the financial seas are calm. After you have taken care of any creditors you need to pay, you can start protecting what you have. Of course it’s perfectly fine to take out loans, and still get a trust, as long as you don’t default on purpose.

In court, the older your trust is, the better it’s going to work. Because if it was establish way in advance of someone suing you, it won’t look like you were trying to hide anything. In other words, implementing asset protection before ending up in an unexpected lawsuit is completely fine, and will in that case provide unbeatable legal protection.

It’s like having a fine wine, which has aged for years. If the grapes you used were good, the result will turn out well. Unless you used bad grapes, and you get quite a different result.

You should now have a good understanding about the difference between a domestic and offshore trust.

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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.