Setting up an offshore trust can be difficult, but it can be worthwhile with the right guidance. Puai Wichman, an expert in offshore trust creation, has outlined five key steps to getting started. Individuals can safeguard their assets from political instability, lawsuits, and other economic risks by establishing an offshore trust. With over two decades of experience in the field, Wichman’s advice is a valuable resource for anyone considering setting up an offshore trust. Wichman’s tips cover everything you need to know to ensure a successful offshore trust setup, from selecting a reputable trustee to creating a solid investment plan.
The Steps In Setting Up An Offshore Trust
Step 1 – Select a Jurisdiction.
Choosing the right jurisdiction is the first and most critical step. While plenty of options exist, the Cook Islands stand out for many individuals due to their favorable regulatory environment and pro-debtor legal practices. What’s more, the trust laws in this beautiful Pacific Island nation tend to be more creditor-proof when compared to other popular jurisdictions. Of course, other options like Nevis, W.I., Bahamas, and Belize may be more attractive to some, particularly those looking for specific solutions or unique advantages.
Step 2 – Pick a Trustee.
According to Puai Wichman, choosing the right trustee is important when establishing an offshore trust. For U.S. citizens, the process can be complicated as they are required to hire a trustee from a foreign jurisdiction. With so many options available, it can be difficult to differentiate between reputable and unreliable offshore trustees. As a result, many individuals opt to enlist the help of a domestic trust company or U.S. asset protection attorney who can guide them in finding a trustworthy offshore trustee. Making the right choice could mean distinguishing between a successful and secure offshore trust and one fraught with risks and legal challenges.
Step 3 – Pass a background check.
If you’re considering establishing an offshore trust, passing a background check will be one of the first hurdles you must clear. All offshore trustee companies must perform a “know your customer” inquiry on potential clients to ensure they will not get involved in government investigations or litigation. Puai Wichman says as part of the background check; the trustee company will investigate your legal situation, verify your identity, and confirm the source of assets being transferred to the trust. It’s important to disclose any pending litigation or investigations as part of the process. However, most people pass the background check without issue. Just be prepared to make exceptions for any pending litigation in your trust documents.
Step 4 – Draft legal documents.
Protecting your assets domestically and offshore is crucial in preserving your wealth. With the help of a skilled domestic asset protection attorney and offshore trustee company, you can draft a trust agreement that aligns with your asset protection and estate planning goals. Not only will they draft the offshore trust agreement, but if your structure includes other entities, the attorney will also draft agreements for them. By customizing the trust agreement to meet your specific needs, you can rest assured that your assets are protected for generations to come.
Step 5 – Transfer assets.
Finalizing the process by transferring assets to the appointed trustee is important to fully establish an offshore trust. Puai Wichman says the transfer of assets can be a critical step as it sets the foundation for the overall structure of the trust. For those who plan on having an offshore Limited Liability Company (LLC) owned by the trust, this is where personal assets will be transferred. One of the main benefits of creating an offshore trust is the ability to hold assets overseas, and the trustee company can assist in opening financial accounts in foreign jurisdictions. Individuals can set themselves up for a strong financial future by transferring and holding assets offshore.
Puai Wichman is the founder and CEO of Ora Partners, an international trust provider and wealth management firm dedicated to helping families and individuals protect personal and corporate wealth.