Offshore Trust
What is an Offshore Trust?
Offshore Trusts combines both onshore planning (planning within the United States) while using the protection of a trustee in a foreign jurisdiction. Since the trustee is in a foreign jurisdiction then typically that jurisdiction’s laws will control the assets and property. In other words, the Nevada Attorney will forum shop and help you determine the best foreign jurisdiction and trustee to establish and maintain your assets and property seeking out the strongest asset protection jurisdictions.
Our clients have used the offshore trust jurisdiction of Cook Islands, Nevis, and the Cayman Islands which are all known for strong asset protection laws. Typically, when clients have maintained assets in an offshore trust, as opposed to moving the assets back onshore to a Nevada Asset Protection Trust, is when they have continued and active lawsuits pending. In addition, the statute of limitations for fraudulent transfers for offshore trusts are much shorter than in the United States. In the alternative, Nevada has one of the shortest periods in which the assets are protected after they are funded in a Nevada Asset Protection Trust which is only two years after the creation and funding of the Trust.
The common offshore trust jurisdictions make it extremely difficult for creditors to seize assets enabling additional layers of protection that are sometimes not available in onshore or domestic asset protection trusts in the United States like the State of Nevada.
Regardless of your decision to use offshore trusts or onshore trusts, our experienced asset protection attorneys in Las Vegas, Nevada, can help you understand the pros and cons of each and then help you execute the most effective planning while taking into consideration taxation. After all, we are not just attorneys – but Certified Public Accountants and with Master of Laws in Taxation. We have degrees and experience and have assisted in helping preserve and protect our clients’ assets and property, especially when bankruptcy and lawsuits are so prevalent in these days in our litigious world.
5 Benefits of Offshore Trusts
- Asset Protection. Probably the largest benefit is the fact that offshore courts and trustees do not recognize United States judgements or orders and do not have to comply with these laws or requirements.
- Litigation Deterrence. Courts and law firms when they hear that assets are offshore in a foreign jurisdiction frequently decline from representing creditor or judgment clients and choose to cease all litigation until assets are brought back to the United States.
- Privacy of Assets. Obviously, trying to discover assets overseas is extremely difficult.
- Flexibility between Offshore Trust Companies. The movement of property and assets between offshore trust companies makes it beneficial to have offshore trusts. These offshore trusts can also hold investments, businesses, equities, and even real estate.
- Settlements. Offshore trusts provide the greatest opportunity to force a settlement between parties due to the difficulty of discovering and then recovering the assets and property. As such, offshore trusts help clients settle lawsuits for pennies on the dollar thereby substantially reducing the claim and liability which preserves and protects the client from unreasonable and improper creditors and creditor claims.
Difference between Offshore Trusts and Nevada Domestic Asset Protection Trusts (DAPTs)
Offshore Trust
- International trustee and jurisdiction who fail to acknowledge and respect U.S. creditor or judgment.
- Strongest strategy when involving creditors, especially foreign creditors, because the foreign jurisdiction laws do not abide by U.S. laws or judgments.
- Intense reporting requirements with the Internal Revenue Service which require filing Form 3520, FBAR, and FATCA.
- Filing and compliance with the new FinCEN rules for beneficial ownership report.
- Costly set-up fees and then expensive ongoing trustee fees.
Domestic Asset Protection Trust (DAPTs) in Nevada
- Established in the United States.
- Established in the State of Nevada – so no state income tax.
- A substantially reduced rate to create and establish the Nevada DAPT.
- A substantially reduced rate (and for some clients – free) or no charge to maintain a DAPT each year.
- A Nevada DAPT has the strongest asset protection benefits in the United States according to Forbes Magazine.
- Easier to maintain and create because you are dealing one hundred percent with local counsel that carries malpractice insurance and is located within the United States.
Combining Nevada DAPT and Offshore Trust
Sometimes clients want the best of both worlds, so they structure transactions taking advantage of both trusts based on their level of risk.
Regardless of where a United States citizen maintains assets either the United States or foreign jurisdiction, they are subject to the worldwide tax system. Just because you use a trust in the Cook or Cayman Islands does not mean you can escape federal income tax on these income producing assets. As such, the following must be reported for all U.S. citizens:
- IRS Form 3520 which involves a U.S. person who must file an Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.
- You must also report accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on Financial Crimes Enforcement Network (FinCEN) Form 114.
- The Foreign Account Tax Compliance Act (FATCA), which was passed as part of the HIRE Act, generally requires that foreign financial institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on with holdable payments. The HIRE Act also contained legislation requiring U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets.
What types of Clients Should Consider Offshore Trusts?
- Doctors, doctors and more doctors! With the number of lawsuits against doctors, especially surgeons, this might be an important part of their comprehensive plan.
- Professions in litigious areas such as attorneys, CPAs, architects, developers, and entrepreneurs.
- Wealthy families.
- Businesses owners who have been sued or are frequently sued.
Why Choose David Bindrup Law Firm for Offshore Trusts or Domestic Asset Protection Trusts (DAPTs) in Nevada.
- We have over 2 decades of tax experience and legal experience because all we do is create estates and trusts, then protect estates and trusts, and then administer estates and trusts.
- 20+ years of experience in taxation and Nevada estate and asset protection planning.
- Integrated strategies combining domestic and offshore solutions
- Compliance-focused approach to avoid IRS penalties
- Flat-fee or transparent billing for predictable costs
At David Bindrup, we educate you on when offshore trust planning is the right choice and when a Nevada trust may be better based on your needs and level of risk.
Locations
Henderson Office
10424 S. Eastern Ave., Ste. 101
Henderson, NV 89052
Las Vegas Office
9030 W. Cheyenne Ave., Ste. 210
Las Vegas, NV 89129
Pahrump Office
1321 S. Hwy 160, Ste. 8A
Pahrump, NV 89048
Phone
702.465.0888