Trusts and foundations are often overlooked when considering Offshore set-ups. One thinks first of the processes for tax optimization used by businesses in order to reduce taxation on their profits. Yet, the appeal of Offshore has many facets. It responds to many problems and can provide solutions for everyone. The management and protection of one’s heritage, or Offshore asset protection, is one example. Trusts and Foundations allow you to efficiently manage and protect your assets towards ensuring and facilitating their transmission.
Differences between Trust and Foundation:
Trust and foundation are not really the same thing.
The Trust is a legal structure used to hold assets, whether movable or immovable, which do not belong to the person who created the trust, called the Settlor. The Settlor establishes the Trust through his contribution and confines the administration and management to the Trustee, a person generally empowered by license. The Settlor also designates an economic beneficiary of this Trust, known as the “beneficial owner”, who will collect the income or management profits from the trust. In order to supervise this Trust, in which the management has been assigned to a third person, it is essential that the Settlor or the beneficiary has the power to revoke the administrator(s) (Trustee) at any given time.
The Foundation is a legal person to which assets have been entrusted. Unlike the Trust, in which property is conferred to the Trustee, here the ownership of the property belongs to the Foundation itself. It is possible for the founder to revoke the administrator at any given time, which provides an additional measure of security to the financial set-up.
The main advantages of Trusts and Foundations to manage wealth
Whether you opt for an Offshore Trust or Foundation, both offer a number of ways to better manage and protect your heritage.
The choice is yours: Trust or Foundation.
- Legislation on trusts and foundations is very favorable for the person who sets them up.
- Most of the offshore jurisdictions offering these services go to great measures to assure confidentiality, so that your privacy and anonymity are guaranteed.
- You can avoid many problems relating to succession in the event of unexpected death by setting up a Trust or a Foundation and thus prevent the befoulment of your capital.
- Finally, you are well protected against prosecution and in cases of litigation.