By Luigi Wewege, President of award winning Caye International Bank in Belize.

Perhaps you are aware of the advantages of establishing offshore time deposit accounts or even checking accounts. The thing to remember is that any of your offshore bank accounts can be helpful in arranging your financial portfolio to your best advantage. Have you thought about how an offshore trust would fit in with your overall investment strategy?

Here are some reasons why establishing a trust in the right international setting would be a smart move on your part.

Housing Your Offshore Investments

Many people who consider establishing trust accounts offshore view it as a way to move assets from domestic locations and tuck them away for the benefit of the next generation. That’s certainly one way to put your offshore trust to good use, but there’s another approach to consider: using the trust to house offshore investments and other assets that you acquire along the way.

Along with securing offshore loans to purchase real estate and making the payments through your offshore checking account, protect that property by pledging it to the trust. There could be additional benefits to having the home you plan on using for retirement managed by the trust. You’ll find the same is true for any offshore investments like stocks and bonds that may catch your eye.

Strengthening Your Tax Position

Tax obligations are always going to be part of your financial planning. The goal is to understand how laws in specific offshore locations impact the amount of tax you will owe. What you may not realize is that housing assets in trusts established in certain offshore locations can keep those taxes to a minimum.

Be aware that tax laws, as they relate to citizens of other nations, will vary from one country to the next. Don’t use the laws in your home country as the basis for making decisions about how to arrange your offshore assets.

In the case of an offshore trust, look closely at how laws in the country where the trust is based affect your tax obligations for the trust and the offshore assets that are held within it. You may find that using the trust helps to keep those obligations a little lower.

Simple Management of Assets Held in the Trust

You know there are several ways to structure a trust in your home country. The same is true when it comes to trusts established internationally. It’s up to you to determine how much control you retain of that offshore trust, and how much responsibility is granted to a trustee.

Be as involved in the trust management as you like. Delegate tasks to the trustee while retaining the right to recover control of those tasks whenever it becomes necessary to do so. For example, you may allow wide latitude for the trustee up to your retirement years. After that, you may choose to reclaim more direct control. It depends on how much or little you want to be involved in the process.

The Ability to Maintain Privacy About Your Wealth

Offshore banks place a great deal of emphasis on guarding the privacy of their clientele. Establishing an offshore trust helps to add another layer of confidentiality and privacy to your finances.

Did you know that you could establish a trust first and then establish offshore banking accounts in the name of the trust? That further helps to provide a means of allocating wealth to those accounts and keeping your profile as low as possible.

It also means that you have a place to transfer interest income from time deposit and other accounts, so they are safely held. At the same time, this approach does not impede your ability to make use of those account balances, as long as you’re careful about how the trust is structured.

Coordinate Trust Holdings with the Rest of Your Estate

Outside yourself and the trustee, no one is in the know about exactly what’s being held. This allows you to use this approach to structure your overall estate with more privacy. It’s especially helpful if your estate planning involves making sure no one knows what you are leaving to them, or what other heirs may be in line to receive.

For your part, it’s easier to survey what you’re holding in the way of assets that everyone knows about versus the ones that are held in the trust. You can decide how to divide these assets in a way that you consider equitable and in line with your wishes. For example, this ensures that a spouse has the resources to live comfortably after you die, while also making sure that children, relatives, and other loved ones receive exactly what you want them to receive.

Know You’ve Created a Comprehensive Plan for Your Wealth

Don’t overlook the peace of mind that comes with knowing you’ve created a plan for the future that’s exactly what you want. Part of that plan focuses on ensuring that you have the resources needed to enjoy a reasonable quality of life after retirement. It also means you feel good about how you’ve provided for those you love after your death.

Once the planning is complete and the trust is up and running, it’s easier to turn your attention to other important matters. In the years ahead, it’s possible to allocate more assets to your offshore trust and further strengthen the plan. That’s sure to help you feel even better about what you’ve created as time goes on.

Get Started on Setting Up an Offshore Trust or Foundation

Now is a good time to investigate the possibilities of establishing one or more offshore trusts and how they can possibly fit into your overall plan for offshore banking and investing.

Although similarly to trusts, foundations are also known to be some of the best structures for offshore asset protection and estate planning.

Focus specifically on the laws and regulations that apply in the jurisdiction where the trust or foundation will be established. It won’t take long to see how you can put this particular financial strategy to good use.

Author bio:

Luigi Wewege is President of award-winning Belize, Central America headquartered Caye International Bank, published author of The Digital Banking Revolution – now in its third edition, and has co-authored economic research which was presented before the United States Congress. He currently serves as an Instructor at the FinTech School in California and as an Advisory Board Member of Fort Kobbe International Vaults in Panama. He holds an Italian MBA from The MIB Trieste School of Management with a major in International Business, as well as a BSBA with a triple major in Finance, International Business, and Management from the University of Missouri-St. Louis.

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