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Offshore Trust: Safeguarding Assets

Many people may not be aware that Trust is classified into various types. These depend on the manner in which they are created and the purpose for which they are created. There are three classifications and one of theseĀ  is Classification by Purpose.

Each trust is established for a particular purpose and this will determine the form and the provisions of the trust. Titles of the trust most of the time convey what is the trust agreement all about. With the purpose stated in the title, a significant amount of information is immediately relayed, just like the Asset Protection Trust. Asset Protection is defined as safeguarding one’s wealth against those who may have claims against it. Reasonably, Asset Protection Trust is one type designed to protect one’s assets from claims of legal predators. One of its two types is the Foreign Asset Protection Trust, also known as Offshore Trust.

An asset protection service, Offshore Trust is defined as an irrevocable trust established in a jurisdiction different from where the trustor is domiciled. Since ownership or legal title of a property is transferred to the trustee when a trust is created, assets of the individual are protected from the reach of creditors or court decisions.

Some Advantages of Offshore Asset Protection Services

In an Offshore trust, an offshore jurisdiction wouldn’t recognize a foreign judgment. For example, if a U.S. court ordered an offshore trustee to return the properties, the offshore trustee would not acknowledge the order, sighting one of its duties to preserve trust property.

An option to transfer assets into an account set in foreign jurisdiction is available. For a creditor to get these assets from the debtor, it would mean filing a case where the offshore trust is located. The creditor would have to present proofs, bring in witnesses, etc. to the trust’s location. This process would be very expensive, time-consuming and tedious on the part of the creditor thus discouraging continuance of claim.

Another benefit is that, when a trust is established in an acceptable offshore jurisdiction, on the condition that residents of the offshore jurisdiction are not included from acquiring benefits from the offshore trust, the assets and the income from the trust will be non-taxable locally.

Privacy is protected with offshore services. All offshore jurisdictions would not divulge the names of the owners of these properties to any foreign government, unless an act of terrorism or crime has taken place.

However one acquired his assets, be it through inheritance or through hard work, protecting these valuable assets is very important. There can be many ways to safeguard them but offshore asset protection is just the strongest option of them all.

REITs: An Alternative Way to Earn from Real Properties

Real Estate Investment Trust defined:

An investment instrument that is sold similar to a stock on major exchanges and invests in real estate directly, either by means of properties or mortgages. REITs obtain special tax considerations and generally provide individuals or investors high yields, and also a very liquid process of investing in real estate.

Types of Real Estate Investment Trusts

Equity REITs. They invest in and at the same time own properties (therefore accountable for the equity or value of their real estate assets). Their profits come largely from their properties’ leases.

Mortgage REITs. They cover investment and ownership of property mortgages. These REITs loan funds for mortgages to people who own the real estate, or acquire current loans or mortgage-backed securities. Their income are generated mainly by the interest charges that they earn on the mortgage loans.

Hybrid REITs. They integrate the investment techniques of equity REITs and mortgage REITs by investing in both the properties and mortgages.


How does one invest in REITs?

People can put money in REITs either by acquiring their shares directly on an open exchange or by investing within a mutual fund that focuses on public real estate. An added advantage of investing in this is that most shares have dividend reinvestment plans (DRIPs). Among other factors, REITs invest in commercial establishments, office buildings, apartments, warehouses and hotels. Some will invest particularly in a single region of real estate – shopping malls, as an example – or in a certain region, state or country. Investing in REITs is actually a liquid, dividend-paying method of participating inside the real estate marketplace.


Source: Investopedia

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