International Trust Accounts for Asset Protection

Posted by: Joel M. Nagel    Posted Date: Thu, 10/03/2013 - 11:39am

Categories: International Asset Protection

International Trust accounts are ideal for high net-worth global entrepreneurs seeking to protect their assets while simultaneously addressing business objectives. Whether you are headquartered in the United States or abroad, you know that handling money can be tricky when it's used for investment in business enterprises overseas. In order to avoid unwarranted scrutiny from government organizations such as the SEC or IRS while maintaining your cash flow goals, you may need to use trust accounts to protect your finances from unnecessary fees and taxes.

Basics of Asset Protection International Trust Accounts

An international trust account is based on the legal instrument of a trust, which is a three-party agreement between a grantor, a trustee and a beneficiary. The language of the trust details the specifics of how a collection of assets such as liquid cash, real estate, business holdings or equities is to be transferred from the grantor to the beneficiary through the trustee. There may be multiple beneficiaries, but there is only one trustee.

Asset protection trusts tend to be irrevocable due to the tax savings they provide. Revocable trusts don't offer any sort of asset protection and are generally ill-suited to entrepreneurs seeking to guard and grow their wealth. There are several different types of irrevocable trusts, many of which may be used as international trust accounts. It is advised to seek the assistance of an asset protection attorney to determine the best type of trust account for your needs.

Trust Account Type Sampler

There are a variety of trust types, each of which may be more or less suited to your international asset protection needs.

The simplest type of trust account is known as a living trust, which is a basic template by which any sort of agreement may be made between yourself, your trustee and the beneficiaries. It gives you the most control over where your assets are going and protects against some taxes and fees. However, some losses may be avoidable with other types of trusts.

Charitable lead trusts allow you a lot of freedom from taxation, but you need to include a registered charitable organization as a beneficiary in the trust. This is ideal for entrepreneurs with philanthropic pursuits, though it may not serve as efficient a purpose when it comes to protecting the rest of your assets.

A personal residence trust allows you to save on specific taxes endemic to real estate transactions, protecting the value of your real assets while keeping them within your business's sphere of influence.

Depending on where your business is located or the nature of your asset base, you may be able to find different varieties of international trust accounts to help you keep your finances intact. Fees differ from state to state, and it is well-advised to consult with an attorney for information unique to your situation.

Choosing a Trustee

Second to choosing the type of trust account you need to protect your assets, choosing a trustee is an important business decision to be made carefully. While many trust accounts have safety measures built in to protect your assets, your trustee will still need to handle communications regarding the assets while they are in his or her care.

About Nagel Law

We represent U.S. capital abroad. For any information you might need regarding international asset protection strategies including irrevocable living trust funds, global tax services or offshore trusts, consult with our team to achieve your goals. When it comes to protecting your assets, you will find no one better.

IRS Circular 230 Notice: The Statements contained herein are not intended to and do not constitute an opinion as to any tax or other matter. They are not intended or written to be used, and may not be relied upon, by you or any other person for the purpose of avoiding penalties that may be imposed under any U.S. Federal tax laws or otherwise.