Q: - What is a trust?

A: - A trust is a contract. When you create a trust you are simply creating another entity. It is sort of like having a baby but much less painful. Think of a trust as another person. That person has a physical address. That physical address can be anywhere in the world. If the trust is a business and the business address is in London, England, it is subject to the jurisdiction of England. If it is located in Belize, then it is subject to the laws of Belize.

Q: What are the essential elements of a trust:

A: The essential elements of a trust are it’s name, it’s address, it’s stated purpose, the name of the trustee or trustees, the powers of the trustee(s), the names of each beneficiary, the percentage of beneficial interest held by each beneficiary, name of a successor trustee in the event the present trustee is unable to serve, and the name(s) of successor beneficiaries in event of the death of the primary beneficiaries.

Q: Can a second trust be the beneficiary of trust.

A: Yes. This is excellent estate planning. The second trust will have the same elements of the primary trust. Instead of naming your beneficiaries in the primary trust you can simply name the second trust as the beneficiary. You can also be the primary trustee of the second trust and your beneficiaries can now be named as successor trustees.

This stacking of trusts is a method that many promoters of offshore trusts use to completely get their client’s assets and income into an off shore tax haven where there may be little or no income tax or capital gain taxes.

Q: How do they do that?

A: Here is an example. A couple own a printing business located in and under the jurisdiction of the United States and subject to their taxing statutes. Trust “A” is established. All the assets of the printing business is placed in that trust. The address of trust “A” can be anywhere in the U. S. The trust agreement between the trustee and the beneficiary require that 100% of the profits of the trust be distributed to the beneficiary during each taxable year. The trust further provides that the beneficiary is responsible for the payment of all taxes. Trust “A” must file an 1040 income tax return. However, there is no taxable income as all of the profits were distributed to the beneficiary, which in this case is trust “B”.

Trust “B” is established. The address of trust “B” is somewhere in one of those offshore taxing jurisdictions. Trust “B” is therefore considered ad non-resident alien. However, a non-resident alien must file an income tax return and report all taxable income to the IRS. But, trust “B” also contains a clause which provides that 100% of the profits in each taxable year must be distributed to the beneficiary of trust “B”. Again this zero’s out any amount of profit - thus no tax. Trust “B” distributes 100% of its profit to trust “C”.

Trust “C” is established. It is completely offshore with a business address in one of the offshore tax havens. Since it receives it’s income from a non-resident alien and that non-resident alien is located offshore the only tax due is whatever tax is due in the jurisdiction where trust “C” is located.

Q: Why did you need to know the above.

A: My reason for revealing this jealously guarded secret regarding offshore trusts is to alert you to just how easy it is to establish an off shore trust. You can do it yourself without have to pay enormous amounts of money to promoters of these offshore trusts.

CLICKHERE TO ORDER - By mail

CLICKHERE TO ORDER - Credit Card