In order for you to have full advantage of your Trust in terms
of asset protection, you need your Trust established as a
"Discretionary, Irrevocable, Pure Trust", domiciled in
an adequate and reliable country that will grant your Trust freedom from any
financial reporting of its activities.
Most of the small countries who do this, also put in a clause that neither
you nor your Trustee can reside in the country. You can still visit the country, but don't pick a country in
which you plan to retire... It does make sense: if this clause
wasn't in place, the country's own citizens would be able
to avoid income taxation.
The other part of this is often ignored. You will find many
offers from Trustees who want to have you establish a Trust in
their own country! DON'T! The reason is that such a Trustee
would be subject to legislation in that country - and such
legislation could change very quickly - which would bring your
Trust in jeopardy, if, for instance, this government suddenly
decided that it wanted access to the files of your Trustee!
With your Trustee residing in a different country, any such
breach of your privacy would take the agreement of two
governments - out of which only one would have a vested
interest in doing it and the other most certainly would not.
Chances of this happening are zero.
Next, you want to pick a Trustee that really is doing nothing
else than taking care of people's Trusts. You do not want
a Trustee who can afford to neglect your interests - you want
this Trustee to put his/her entire future existence at stake for your Trust!
With such a Trustee, you will know that your Trust will be
taken as good care of as possible because you have a "win-win"
or a "lose-lose", never a possible "win-lose" where your
Trustee could have advantages from your loss....
You should, of course, make sure that you can actually
check out who your Trustee company is and what kind of
reputation it has. You do not want to do this kind of
business with a "fly-by-night" kind of company and you
for sure don't want to do it with an individual person...
The set-up process takes place in accordance with a "Deed"
for the Trust - which really is an agreement between you
(the Settlor) and the Trust, outlining the rules for the
Trust's operation and its purpose. This Deed makes you
the Settlor (or Grantor) of the Trust,
and you also become the Beneficiary of the Trust, unless
you have a specific different purpose in mind.
You can deposit funds on the Trust's account, and you can
have the Trustee write and send checks from the account
to payees of your choice, except yourself! (If you
do, the money will be considered "taxable income" for you unless you
can prove otherwise to your taxman).
You communicate with your Trustee per phone or fax or e-mail
or mail as you want. In order for you to have the Trustee take
any action on behalf of the Trust, however, you must submit a
written "Letter of Wish" to express your desire. It is highly recommended to do this through encrypted e-mail, or by registered mail or courier.
Expect to pay $1,500-$2,000 in fees for setting up
your Offshore Trust. Those fees will cover both the government filing fees, the Trustee's fee,
and the company's marketing costs and overhead. For your
Trust to be operational, you may need a bank account for it.
Just a simple account. All banks will require an opening
deposit on such an account - typically $200-500. This money
is really not part of the "cost" of your Trust, but it is, of
course, an extra personal expense you need to be prepared for.
You must also expect a yearly maintenance fee for your Trust,
typically in the range of $200-500.