Understand how wealthy individuals use trusts to manage and protect assets across borders, reduce taxes, and ensure intergenerational wealth transfer.
High-net-worth individuals (HNWIs) often turn to trusts as a powerful tool for international tax planning. Trusts allow them to legally separate the control and ownership of assets, shielding wealth from high estate taxes and enhancing privacy.
In common law jurisdictions like Singapore, the British Virgin Islands, or Jersey, discretionary trusts are commonly used. These structures give trustees broad powers to manage assets on behalf of beneficiaries without triggering tax liabilities in certain cases.
Key Benefits:
- Reduce estate/inheritance taxes
- Avoid forced heirship laws in civil law countries
- Plan for succession and family governance
- Combine with offshore foundations for more control
FAQ:
Q: Do trusts help reduce income tax too?
A: Only if structured properly. The goal is usually asset protection and inheritance planning, not income tax minimization.
Q: Are trusts illegal?
A: No. They're legal if disclosed and structured within local laws.
Editor's Note:
Be aware of recent OECD crackdowns on opaque structures. Transparency is the new standard.
Tags: offshore trust, estate planning, asset protection, foundation vs trust
(Editors: admin)