Features of Asset Protection Trust

In many ways an Offshore Trust looks like a standard domestic trust. The settlor is the person who transfers the assets to the trust. The trustee is generally a trust company, whose business is operated outside of the United States. The arrangement differs from Privacy Trust-Plan #1 and Privacy Trust-Plan #2 because, in this case, the trust company is located in a foreign country-outside the jurisdiction of U.S. courts. The Offshore Trust takes advantage of favorable asset protection and privacy laws which exist in other parts of the world.

In a typical trust, the trustees are given discretion to accumulate or distribute income among a specified class of beneficiaries. The settlor may be one of the named beneficiaries, together with his spouse, children, or grandchildren. One unique feature of this kind of a trust is the role of the Protector. The Protector is a person, designated by the settlor, whose consent is necessary for certain activity by the trustees. The term of the trust may be limited to a period of years, or it may continue after the settlor’s death.