Trust Formation 

The creation of a trust can be an important part of any estate planning or weath preservation strategy.  If you take inventory of your financial situation, you may discover that the safety of your money is at risk.  If you want to be assured of your funds safely tranferring to your loved ones and your children after your death a trust is a great vehicle.  But a trust can do much more than that for you... especially if it part of an asset protection strategy.

Offshore vs Onshore Trusts 

An offshore trust is very similar to an onshore trust in many ways.  The have a settlor, in charge of settling or transferring assets, and trustees who then manage those funds or assets or property.  Of course they also have beneficiaries who will will receive the benefits of the trust based on the conditions set out in the trust.

Offshore trusts are modified to suit tax havens. 

Many tax havens / offshore jurisdictions have  changed their laws to better suit the settlor, protecting the assets he entrusts into the care of the offshore trust.

Switzerland, Liechtenstein and other offshore tax havens havens went so far as to use a statue to bring the trust concept in from english common law.

The Bahamian Trust 

In the Bahamas, the trust is viewed as a private agreement amongst parties, and as such, registration with the government is unnecessary, as long as the trust does not hold any Bahamian real estate. The law allows for the establishment of an asset protection trust, a testamentary trust (which goes into effect after the settlor's death), or a charity trust.

The law concerning trusts in the Bahamas is modeled after English law. This was first set down in the Trustee Act of 1893, and subsequently modified and updated by a number of statutes. The most important of these are:

The Trust (Choice of Governing Law) Act 1989: this Act was intended to remove the problems posed by such concerns as community property, and forced heirship. It tackles areas concerned with trust administration and allows a settler to declare that Bahamian Law is the law that will govern the trust.

The Fraudulent Disposition Act 1991: this Act provides additional protection for trusts responsible for protecting assets. Any disposition of property made to defraud can be voided by people who wish to protect their assets from future claims.

The cost of setting up a trust will depend on the document and its requirements and provisions. It is best for one who wishes to put up a trust to acquire the services of a Bahamian attorney, in order to prevent a court from judging the document as invalid. The attorney needs to know who the beneficiaries are, the manner in which they will receive their share of the assets, and if there will be an appointed 'protector of trust' (legislated by the Trustee Act 1998) and what powers that protector will have and how he or she will be succeeded. The 1998 Act also rules that people involved in the trust, if non-resident, are exempt from Exchange Control Regulations.