A Trust is defined as a fiduciary relationship in which one party, known as a trustor or settlor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary or beneficiaries. 

 The Trust Deed is a written, instrument or contractual agreement that must provide the details of the duties of the trustee, the name or names of any beneficiaries and obviously the assets protected by the trust. This agreement allows a settlor to make confidential provisions for himself and his family that prevent his assets being lost in taxation. This is done by, either during his lifetime (a living Trust) or after death (a testamentary Trust), transferring his income and assets to a trustee who is able to secure and administer them in a tax free jurisdiction, for example Switzerland, the Cayman Islands, Antigua, Barbuda, Belize, Panama, Liechtenstein and the British Virgin Island.

Asset protection trusts are now an important financial planning tool for anyone who holds assets they do not wish to lose. Such trusts are common with entrepreneurs, developers, professionals, doctors and businessmen. A Trust provides a security in today's generally uncertain and ever increasingly so climate, where the threat of predatory lawsuits and punitive and retroactive government regulation is commonplace.

The offshore Trust's main purpose is to protect the assets of the settlor against financial ruin occurring from any number of factors, including excessive death duties, marital or family breakdown, mismanagement of business ventures, political risk, a spendthrift family member and contingent creditors.

The Trust has an underlying principle that clearly and indisputably separates the legal ownership of the asset (which lies with the trustee) from the beneficial ownership of the asset, which of course is held by the beneficiaries. The trustee must give the settlor an assurance that he or she will take all responsibility for the asset and deal with it or distribute it according to the wishes of the settlor.