Are you considering using a trust for purposes of creditor and asset protection? Do you know the difference between a foreign trust and a domestic trust sitting in West Palm Beach? Before you execute a trust charter and get on the hook for the costs of administering it you should learn the pros and cons of both.
Domestic Trusts
- Domestic trusts located in West Palm Beach have several great benefits for people looking for creditor protection.
These trusts cannot be executed simply to avoid creditors. - If you are merely dodging creditors an experienced lawyer may have that transfer set aside under Florida’s Fraudulent Transfer Act.
- That being said a trust executed prior to those concerns may offer protection from creditors.
- If you are unsure whether or not a domestic trust is right for you talk to an experienced Palm Beach trust lawyer.
- The good part about domestic trusts is the lowered costs and ease of administration when compared to a foreign trust.
- In fact you may want to serve as the trustee in West Palm Beach!
- So what is all the hype about foreign trusts?
Foreign Trusts
- Foreign trusts are those that are held and administered outside of the USA.
- Often times these are made in foreign jurisdictions that offer protection from creditors.
- Common examples are small island nations like the Cook Islands, Isle of Man or Nevis.
- Do you know why these laws are so favorable to debtors?
- The downside to a foreign trust is that it is in another jurisdiction and the funds can be harder to manage.
- Often times these jurisdictions make favorable laws in order to spur investment into their own economy.
- That means you will probably need to hire a local trustee company to serve.
- Guess what, they do not administer for free so that is going to take a cut out of your own pocket.
- If you are considering setting up a foreign trust make sure to talk to your local Palm Beach trust attorney to discuss how this changes your estate plan.
- You are also going to want to talk to professional tax consultants.
- You are still responsible for IRS and Fla. Dept. of Revenue compliance if you operate a foreign trust.