As a high net-worth global entrepreneur, you are a global force for business and the economy. In order to protect your dealings and address your business objectives, you need trust accounts that provide solutions to your personal asset protection and estate planning goals.
Trust accounts are the ideal way to address your operations outside the United States without causing increased IRS scrutiny, SEC investigations or legal regulatory issues that could put a damper on your business. Whether you live or operate businesses outside of the United States, consider an asset protection trust to safeguard your finances.
What is an Asset Protection Trust?
A trust is a basic legal agreement in which the owner of a certain set of assets transfers ownership and legal title of those assets to a trustee. It is the trustee's job to pass the assets or benefits thereof to one or more third parties, also known as the beneficiaries. While often included in a will, trusts can be used for all sorts of purposes, including asset protection.
There are two types of trusts: revocable and irrevocable. Revocable trusts are more flexible and can be changed at any time, though they are also subject to taxes. Capital gains taxes on irrevocable trusts may be paid by the trustee depending on the type of trust, but they are not subject to estate taxes. It is advised to consult with an asset protection attorney to see which type of trust is best for your business interests.
Generally speaking, however, irrevocable trusts are best suited for asset protection purposes. There are several different types of irrevocable trusts, each with its own fees, benefits and rules for disbursement, use and control over funds.
Different Types of Trust Accounts
In addition to revocable or irrevocable trusts, there are also different flavors of the trust account available to savvy entrepreneurs. These range from living trusts, which provide the most control over the income, to personal residence trusts, which allow you to achieve tax savings on real estate owned by you or your companies, to charitable lead trusts, which offer some of the best tax savings in exchange for regular donations to a favorite charity.
Different trusts have different fees, and fees vary from state to state. Consult with your attorney for different asset protection strategies to help you meet your business goals while reducing your tax liabilities.
Responsibilities of the Trustee
If you choose to place your assets in an international trust account, the choice of your trustee will likely be the most important one you make. You need to be able to depend on your trustee to take the necessary steps to protect your assets in a variety of potential circumstances.
One of the most common practical applications for trusts is to shield assets from creditors. If it is difficult for creditors to seize assets from within trust accounts, the trustee may be responsible for contacting the creditor and settling for more favorable terms to avoid costly litigation. This will protect your hard-earned wealth and help your business ventures thrive.
Developing Strong Business Partnerships
More than most asset protection strategies, trust accounts demand that you develop strong business partnerships with other parties or entities involved and mentioned in all legal documents involved. You will have to develop a level of trust in your trustees and beneficiaries to behave appropriately and meet all legal obligations while simultaneously protecting your bottom line.
At Nagel Law, we represent U.S. capital abroad. If you need any assistance or advisement on protecting your assets through an international trust account, we can provide the information and services you need to do so in an above-ground, fully legal manner that avoids increased legal scrutiny and allows you to build your financial profile and do what you do best as a global entrepreneur.
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.