Establishing offshore financial accounts is a great strategy for protecting certain assets and positioning yourself to amass wealth at your own pace. One of the financial tools that you should consider is the offshore trust.
It’s not just about setting up a trust that’s based in some international location. You want that trust to reside in a country that provides important benefits for you and for those who will ultimately receive disbursements.
Belize is a nation that offers some of the most comprehensive options for trusts anywhere in the world. Before you set up trusts in a different offshore location, learn more about the process for offshore trust formation in Belize. Here are some of the basics that will help you get started.
What is the Basic Concept of a Trust?
A trust is a financial instrument that makes it possible to retain ownership of assets while authorizing another party to oversee the management of those assets. With this type of arrangement, you are known as the settlor or the owner of assets. The person who is designated to manage all assets placed in the trust is typically referred to as the trustee.
While you retain ownership of those assets, everything that’s held in the trust is considered separate from your estate. As a means of providing for loved ones or a cause that’s dear to your heart, this approach to wealth preservation makes a lot of sense.
Who Can Establish a Trust in Belize?
Current laws in Belize allow individuals and couples to establish trusts. This works well when the plan is to protect assets that are intended to be given to one or more beneficiaries once the settlors have passed away. In the meantime, those assets are exempt from seizure as part of a bankruptcy action or any type of domestic legal judgment.
It’s also possible to establish a trust as a business entity. Belizean laws make it simple to form what’s known as an International Business Company or IBC. Business owners can use this approach to protect assets from any type of legal action, ensuring that ultimately the beneficiaries receive full control.
Individuals, couples, and businesses that are properly incorporated as offshore entities in Belize may establish trusts with multiple beneficiaries. The same is also true for foundations, other trusts, and partnerships. It’s also possible to set up trusts that eventually direct the assets to a charity rather than to individuals.
Does Belize Require a Trust Agent?
Creating a trust in Belize requires the aid of a trust agent. While the settlor and the beneficiary do not have to reside in the country, it’s essential for the agent to be a resident of Belize. The agent is responsible for helping the settlor structure the trust and ensure that every provision is in compliance with current laws and with the wishes of the settlor.
The trust agent also handles the submission of the trust to the Belize Trust Registry. In most cases, the trust agent will be a different person from the trustee. However, it is possible to arrange for the same person to function in both capacities.
What Information Must Be Provided to the Trust Registry?
Only a fraction of the details related to the trust must be submitted to the Registry. Specifically, the name of the trust itself is part of the submission. The settlement date for the trust is also provided. The names of the trustee and the trust agent are also provided to the Registry.
All other information is retained by the trust agent. Data is made available to the trustee based on the authorizations that are extended to that person. In the event that you choose to add another person as the protector, that information remains in the control of the trust agent. The protector’s name is known to the trustee, since much of the protector’s responsibilities involve oversight of how the trustee is managing the trust. Keep in mind that current laws do not require that you name a protector.
What is a Trust Deed?
The trust deed is one of the documents prepared by the trust agent in conjunction with the settlor. Sometimes referred to as a Deed of Settlement, it provides the framework for how the trust will function and who is responsible for what tasks.
Within the deed, you will include the specifics related to what the trustee is empowered to do on behalf of the trust. All beneficiaries are named within the document so there is no confusion about who will ultimately benefit from the assets held within the trust. The deed will also detail all assets that are being assigned to the trust and are no longer under the control of the settlor.
How About the Letter of Wishes?
A Letter of Wishes is a separate document that’s addressed directly to the trustee. The settlor can outline tasks that he or she wishes the trustee to manage as part of overseeing the trust. Anything that’s included in the Letter of Wishes must be in line with the terms of the trust deed.
One key difference between the trust deed and a Letter of Wishes is that the latter is considered non-binding under Belizean laws, while the former is binding. Consider the letter to be a list of suggestions and expressions of how the trustee is to act if certain circumstances arise. If there is anything that you want to be binding, it should be clearly stated in the trust deed.
Can Anyone Access the Trust Registry?
The International Trusts Registry is not available to the general public. While it contains relatively little information about the trust, even that small amount of data is protected under current laws.
Who can obtain information from the Registry? As persons named in the information provided, the trust agent and your trustee are able to obtain data about your trust. If you should decide to make changes or want to review any part of the trust arrangement, the trust agent can help.
Why Establish a Trust in Belize Rather than One at Home?
On the surface, offshore trusts in Belize look a great deal like what you could arrange at home. Are there compelling reasons to establish your trust in Belize? The answer is yes.
One of the major benefits has to do with asset protection. No matter what happens at home, any assets placed in the trust cannot be seized. Along with protection in the event of bankruptcy or a personal injury judgment, the assets held in the trust cannot be seized due to a divorce or suits involving the succession rights to the settlor’s estate.
A major difference between asset protection in Belize and in other nations is how quickly those protections become active. In some nations, a waiting period of up to five years may apply. In Belize, the protections are in effect the moment that the trust is recognized by the Trust Registry.
Another has to do with access to assets capable of producing greater returns. Investment opportunities that are not eligible for inclusion domestically may be allowed in Belize. As a means of creating and protecting a legacy for a person or cause that you care about, the provisions for trusts in Belize are hard to top.
Getting Started with Offshore Financial Options
The offshore trust structure in Belize provides the ideal setting for protecting and expanding wealth. It is a tool that can be used to help you achieve your financial goals and ensure only the right beneficiary receives benefits.
Trusts continue to be popular avenues for individuals who want to keep the keep and grow the assets they’ve worked so hard to earn. Now is a great time to add international options to your financial portfolio.
I hope you enjoyed reading: Understanding the Belize Offshore Trust Structure and Why You Need One . If you would like to talk with Luigi Wewege, please reach out to him HERE. I’ve also included some really great articles from Luigi, have fun!
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition. You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
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