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Where Is 'Offshore'?
The term "offshore" connotes many things — some unfavorable, many
inaccurate
To some,
the term "offshore" suggests exotic foreign locales with long, white
sandy beaches and grass-skirted natives. Others think of
white-collar criminals hiding out in some foreign fortress immune to
U.S. laws.
Neither
picture is accurate. Notwithstanding the graphic above, "offshore"
does not necessarily mean tropical; any country other than the U.S.
is offshore, and there are about 60 jurisdictions that can
accommodate your trust business. "Offshore" also does not mean the
dominion of the con man, racketeer and fleeing felon. Wealthy,
respectable citizens with nothing to hide or fear are turning to
offshore jurisdictions as a matter of prudent planning. Current
estimates say that $5 trillion is currently under management in
offshore financial centers.
The right jurisdiction.
Savvy
investors often realize the importance of picking the right
jurisdiction for their situation. For example, large corporations
having no operations, assets or physical presence in Delaware have
incorporated in that state because of its favorable corporate law.
Likewise, many business owners have signed contracts that contain a
clause providing that, say, Illinois law will apply to a particular
dispute.
So it is
with international trusts. In founding a trust as the cornerstone of
an integrated estate plan, we look to the foreign jurisdiction whose
law is most favorable to you and that offers the maximum protection.
Selecting a foreign home.
The 60
jurisdictions that can accommodate your trust vary in their
desirability. A good host country should:
-
provide
statutory certainty on key trust and fraudulent conveyance issues;
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be
politically stable;
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have
modern telecommunication facilities;
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offer a
variety of trust professionals who understand the purposes and
uses for international trusts;
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present
no language or cultural barriers; and
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impose
little or no taxation on trusts domiciled within its borders.
We have
found that two jurisdictions in particular serve as attractive hosts
for international financial plans:
-
the
Cook Islands, a self-governing,
South Pacific island group in free association with New Zealand,
located about 2,800 miles west of Hawaii, and
-
the
island of
Nevis, near St. Kitts in the
Caribbean Sea.
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