Offshore trusts are mostly about evading taxes, but they do offer a couple of extra privacy benefits as well. The word “offshore” has been linked to crime, but offshore trusts are completely legal. They are the ultimate in privacy, have asset protection, tax reductions, protection from inflation, reduction in liabilities, all the same as a regular trust from a regular bank in your home country. Remember, it is usually completely legal to establish an offshore trust, have a bank account, or conduct business in a tax haven, but you should check with a lawyer in your home country to confirm this just to be safe, as each country has its own policies about offshore trusts and holding companies.
Irrevocable Trust and Revocable Trust
Usually when you start a living trust fund you are going to be starting a revocable trust. This means that you can change the terms of your trust or cancel it all together before the trust is given to the beneficiaries. The advantages to this are obvious, in that if you change your mind or something comes up that you need the funds for then you can get them whenever you want. The only disadvantage to a revocable trust fund is that because of legal issues they do not have the same tax benefits as irrevocable trust funds do. That is your estate, and assets, still apply to be taxed when they are in a revocable trust fund.
The way to save the most tax money is to have an irrevocable trust. All testimonial trusts are irrevocable since the settlor of the trust has to have died in order for the testimonial trust to be created. The deceased is not around to make changes or cancel the trust so there is no need for it to be a revocable fund. Both irrevocable and revocable trusts share all the rest of the benefits of trusts, excluding the tax benefits. Remember, these benefits include privacy, control, less legal difficulties, less financial management hassles, and you can have the peace of mind that your children, spouse, friends and other family will be taken care of financially.