What Is A Revocable Trust? – Advanced Offshore Asset Protection

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It’s known as a trust for a reason. You may want to protect your assets, gain some kind of tax advantage or pass on inheritance in a smooth way.

Before setting up a trust, you need to decide the amount of control you want, which determines the kind of trust you need.

What is a revocable trust really?

A revocable trust allows you to rewrite the terms of the trust document (that includes how assets will be managed and distributed).

The question is then, how much control do you need? With a lot of control, less benefits. If you have less control, more benefits. That is what determines if you should use a revocable trust or not.

What Is A Revocable Trust - Advanced Offshore Asset Protection - Infographic

Asset Protection

Property transferred to a trust, is not considered to be owned by you. Therefore if a creditor tries to go after you, it can be impossible to reach your assets. The problem with a revocable trust, is a judge can order you to dissolve the trust structure, leaving you with no protection in place.

However, with an irrevocable trust you have more protection. And it’s possible to still allow certain parts of the document to be amended. That might be limited to changing beneficiaries, which can be a useful feature, instead of having to set up an entirely new trust, in order for that change to be made.

Inheritance And Taxation

In some cases depending on what tax system you are subject to, it’s possible to limit taxes on assets you leave behind, as part of someone else’s inheritance.

You can in a lot of cases eliminate your beneficiaries from needing to go through probate court, making it easier to transfer your wealth to the next generation.

Having a revocable trust isn’t always a determining factor in gaining these benefits. An irrevocable trust can be used instead, which in many cases is a more preferred solution.

Conclusion

Establishing a trust is only recommended for those with a decent amount of wealth. You can form a trust in a number of different places, and end up with a cheap solution, but then you will also have a limited amount of benefits.

To achieve strong asset protection, it is necessary to get an offshore trust. Not only because the laws are stronger, and you are keeping it outside of your home country’s legal system, but usually the alternative onshore is not that good. It’s better to invest in a solution that will serve you for many decades to come, than waste your money on something that simply doesn’t work.

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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.