Is an international trust right for you?
Reinforce your asset protection plan.
Through hard work and smart investing, some individuals have a significant amount of wealth that they need to keep safe. Whether the wealth is earned from the white collar and blue collar worlds, or through self-employment, nobody wants to work hard for their money and watch it slip through their fingers. An asset protection plan is the only way these people will be able to ensure their wealth is not lost to creditors or anyone else who may be trying to get ahold of their earnings.
A large amount of asset protection plans involve taking wealth and placing it offshore, whether in offshore bank accounts to keep safe, or international investment vehicles, like an investment trust. This article will explain the basics of international trusts. If you want to know if an international trust is right for you, contact Goldbach Capital today!
What is an International Trust?
Also known as an offshore trust or offshore asset protection trust, an international trust is a trust that is set up outside of an individual’s, also known as the settlor, jurisdiction of living. With this kind of trust, individuals legally transfer out of reach of future creditors and put them in an impenetrable place.
The way this works is taking the assets out of your name and putting them in an international trust. As the owner of the assets, you choose the trustee, settlers, and beneficiaries and still have control of the assets while in the offshore asset protection trust.
What an International Trust Can Do
Before deciding if an offshore trust is the right investment vehicle for you, let us cover what exactly an international trust can do for investors.
Legal Asset Protection
We specified ‘legal’ asset protection here because many imagine asset protection as a heinous act of deception, lying, and hiding money from authorities in illegal banks. That’s not the truth at all.
Asset protection is the number one reason an international trust is set up. When kept in an international trust, an investment is held outside of a civil creditors reach because U.S. judges do not have jurisdiction over an offshore asset trust. They cannot ask a foreign trustee or asset protection trust to release the funds to someone who claims they are owed money.
Diversification is a staple in any successful portfolio. Modern Portfolio Theory has been proven in that diverse portfolios outperform a concentrated one. Owning a large number of investments in more than one sector or asset class can protect investors from unsystematic risk, a risk that one encounters when investing in a single company.
By diversifying with international investments held, investors combat portfolio volatility while maintaining high returns. It is essential to invest in non-correlated asset classes.
Taking wealth offshore opens up investment opportunities that are not available in many nations. There is an added level of flexibility and choice due to differing economic and political events happening all over the world. Some asset classes in a specific nation may be outperforming the exact same asset class in a different country. For example, Portugal has a thriving real estate market, while others have not gained footing.
If investments in your country are not providing the returns you are happy with, nothing is stopping you from investing in markets all over the world.
Many investment opportunities around the world require some kind of offshore entity. By holding an offshore asset trust, you are opening yourself up to those opportunities.
One of the main reasons some individuals take their wealth offshore, in general, is because of privacy. This does not mean they are expecting to commit financial crimes by hiding their money. They simply believe that it is nobody’s business what they do with their money other than their own.
An international trust will reduce an investor’s exposure to frivolous litigation and ensure that no interested parties can get a hold of personal information. It is almost impossible to break the protective wall that is provided by the international trust.
While an offshore asset protection trust is a great way to hold your funds outside of the reach of potential creditors, its benefits are not limitless. An international trust does not shield your investments from taxation. Income earned from international investments will be subject to taxes. This includes estate taxes when distributed. To understand more about the legality of saving on taxes by going offshore, consider reading about tax compliance [Family Office- Tax Compliance].
How to Set Up an International Trust
To set up an international trust, an individual will need the assistance of a professional lawyer, familiar with the regulations on how to set it up vary from country to country. Any trust, domestic or offshore, has their own application but all require the assistance of an attorney as well as a financial planner.
Typically, when forming an international trust, the individual setting it up is called the settlor or grantor. The grantor will give a lawyer directions on how the assets in the trust are going to be managed and assign beneficiaries.
Trustees are appointed that manages the assets. Usually, the grantor assists with managing as well. The international trust will receive a title, and the settlor is no longer the legal owner of the assets.
Don’t Plan Alone
Goldbach Capital has the knowledge and resources to become the trusted partner of wealthy families. We offer a comprehensive range of services, by combining proprietary expertise with an external pool of first-class advisors.
Each client can decide which modules he wants to engage Goldbach Capital on. Thanks to its efficient and cost-effective solutions, Goldbach Capital is a credible alternative to existing or projected in-house organizations.
While incorporating our approach in life simplification, cost-cutting, and asset protection, growth, and monitoring, our family office services integrate your family’s vision and core values to create the right wealth management plan for you.
Goldbach Capital is eager to assist you every step of the way. Taking wealth offshore can be an exciting process. While there is much work to be done, it should not have to be hard.