Wealth International, Limited (trustprofessionals.com) : Where There’s W.I.L., There’s A Way

Interacting with Offshore Entities via Private Contracts

© Copyright 2015 Wealth International, Ltd.

We live in a society ruled by paper – paper money, deeds, titles, paper marriages, written contracts and agreements, and even birth and death certificates. Be it a house, car, or marriage, it is paper, not physical possession, use or association, that conveys and denotes ownership and/or legal standing.

Those who have investigated the utilization of trusts, domestic or foreign, understand that their value is derived from the relinquishment of legal ownership of assets to the trustee. However, to truly surrender ownership of an asset, one must relinquish all paper relevant thereto. Less well understood about structuring trust arrangements – perhaps because the reluctance to totally give up control is deeply implanted – is that additional benefits can be realized by relinquishing all beneficial interest, that is, the certificate of beneficial interest, capital unit certificate, or beneficiary designation absent actual certificates, as well as all Trusteeship. Further inquiry into this general idea reveals that the significance of the form of the legal structure recedes, and non-trust entities are a perfectly viable vehicle for accomplishing true asset protection.

Ownership on paper is legally deemed to be ownership of the thing itself, as evidenced by IRS grantor trust rules, wherein any “U.S. person” that is the grantor of a foreign trust with U.S. beneficiaries is taxed on all income of said trust as if it were his or her own.

The question then, arises: If one conveys an asset to a legal structure and at the same time retains no legal control (is not a trust Trustee or Protector, IBC manager, etc.), nor retains any equitable interest in the asset (trust Beneficiary, shareholder, etc.), how does one benefit?

The complete discussion of contracts is included as an appendix to our comprehensive introductory publication Introduction to International Asset Protection. To obtain complete access to that publication we invite you to go to this page and sign up.

NOTE: This report is presented with the understanding that the publisher is not engaged in rendering legal or accounting services. Questions relevant to the specific tax, legal, and accounting needs of the reader should be addressed to practicing members of those professions. This information was gathered from sources believed to be reliable but it cannot be guaranteed insofar as it applies to any particular taxpayer. Wealth International, Limited specifically disclaims any liability, loss, or risk, personal or otherwise, incurred as a consequence directly or indirectly of the use and application of any of the techniques or contents of this report. No copies of this material may be made or redistributed without the express written consent of Wealth International, Ltd.