| Legal Implications of Offshore Trust Set Up | |
| Offshore Trust Set Up is governed by a broad range of conventions. Our Clients should be aware of the legal implications when considering Offshore Trust Set Up. Some of the points to consider in relation to Offshore Trust Set Up include: | |
| 1. | A Trust is not automatically governed by the law of the country in which it has been formed. During the Offshore Trust Set Up process, it is necessary to define the law which should govern the Trust in the Trust Deed and in the Letter of Wishes. Some jurisdictions in which the Offshore Trust is Set Up allow a Trust to be subject the the laws of a third jurisdiction. |
| 2. | During the Offshore Trust Set Up process, the conditions of the Trust can specify that its separable aspects, especially those which concern the administration of the Trust, will be governed by a different law than the appropriate law applicable to the Trust under which it has been formed. |
| 3. | The law governing separable aspects of a Trust can also be changed from the formation country law to a law of another jurisdiction and vice versa. If it is not specified in the Trust Deed by which law the Trust is governed during the Offshore Trust Set Up process, the Trust will be governed by the law corresponding to the intent of the Trust Settlor, unless it is in contradiction with the local jurisdiction and legislation. If this intent is unclear, then the Trust is often governed by the jurisdiction with which the Trust had the closest contact at the time of its establishment, i e according to the place of residence or registered office of the Trustee, place of Trust administration specified by the Settlor, where the targets and purposes of the Trust are to be achieved and the jurisdiction in which the Offshore Trust Set Up has been completed. In the case when it is not clear enough, it can be decided by a competent court. |
| 4. | Many countries have legislation in relation to Offshore Trust Set Up. For example, the US now has strict reporting requirements on assets transferred into Offshore Trusts, and the management and beneficiaries of the assets. Due to new US and Canadian tax rules, taxation authorities are now openly discouraging Offshore Trust Set Up. |
| 5. | In many jurisdictions a Trust Deed is not registered with any tax authority or government authority and is therefore a private agreement between the parties during the Offshore Trust Set Up process. Normally there is no requirement to file the accounts of a Trust, nor have them audited by an independent auditor. |
| Contact Us | |
| For more information on Offshore Trust Set Up, please email email@healyconsultants.com or telephone us at (+65) 6735 0120. | |
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