OFFSHORE TRUSTS
Purposes of Offshore Trusts
US Tax & Other Considerations:
* Offshore trusts should not be used to protect you or your assets from US government agencies or creditors owed.
* Offshore asset protection is best for liquid assets, such as bank and brokerage accounts, or (local to the jurisdiction) other assets. It is not proper or beneficial to hold US real estate.
* Offshore asset protection trusts and LLCs are disregarded for US tax purposes. Asset protection does not reduce US taxes. US citizens and residents are taxed on worldwide income, including capital gains in offshore trusts and companies, in the year earned. Note that offshore trusts and companies will not result in "double tax" because the US tax code allows a dollar for dollar tax credit of any foreign taxes paid. However, most structures are not taxed outside of the US.
* It is a crime to use offshore entities to hide money from the US IRS or other US government agency.
* Offshore accounts should be funded with "after tax income."
* Offshore asset protection is intended to protect your assets from future creditors. A US attorney is not allowed to assist you to transfer assets out of the reach of an existing or eminent creditor.
* USA persons or companies cannot be creators or beneficiaries of offshore asset protection entities and bank accounts. Such arrangements require the filing of various tax and informational forms with the US IRS and US Treasury.
* It is a felony to fail to disclose the existance of offshore accounts.
* There is usually a safer and easier way to protect assets without the expense and risk of an offshore trust.
|
|
