If you are concerned about your tax
situation when being either the Beneficiary or the
Settlor (Grantor) of your Offshore Trust, you can use a "Foreign Grantor Trust" (FGT). The set-up is the
same as for an "ordinary" Trust, except that an FGT is
not having your name mentioned anywhere in the legal documents, and it is not set up by you or on your order/request..
The Trust is set up with someone else as the Grantor (Settlor)
and a nominee Beneficiary, chosen by your Trustee-to-be.
Instead of any official titles, you get some specific legal tools to make sure that the Trustee and/or the Protector will do what you want, and only that. With such a set-up, you can honestly answer "no" to all questions about you being the Grantor or the Beneficiary of any foreign Trusts, at least as far as this Trust goes....
For your practical day-to-day use of an FGT, there is no difference
from what you would get with an "normal" Trust, but the nature of the legal tools that make this possible is totally different, as you have no formal legal authority to make any management decisions on behalf of the FGT. The benefit to you is the peace-of-mind you can obtain from knowing
that you are not providing any false information to your
government when answering "no" to all questions about you
being the Beneficiary or the Grantor of any foreign Trusts.
(No government, including the US government,
has any legitimate business asking such questions, though
- they are in violation of your fundamental constitutional
freedom rights! But you might prefer to fight for
those rights at another time than at tax return time when
you are alone and vulnerable...)
Because of the extra administrative
work involved, you should expect an additional charge of
$300-500 for an FGT. Also be aware that many Trustees operating
in countries that do not allow FGT's in their jurisdiction
cannot help you with this... So, if it is important to you to
not have to lie to your government or make false claims on your
tax returns, and you do not want the hassle out of disclosing the
existence of your Trust, you have to be very selective about whom
you get to establish your Offshore Trust!