Many
factors must be considered
before selecting a jurisdiction
in which to establish
an asset protection trust.
The decision must be
based upon a review of
the relevant statutory
law, the case law if
any, the availability
of trustworthy co- counsel
and the existence of
an acceptable trust company.
Great care should be
taken to choose a jurisdiction
which allows the settlor
to best achieve his or
her goals. The specific
laws of the jurisdiction
should be checked with
respect to the following
factors:
1.
Common Law heritage:
Does the jurisdiction
have a common law heritage
with a specific history
of recognizing trusts?
Civil law jurisdictions
which recognize trusts
(i.e. Liechtenstein)
create their trust
law by statute and
do not deal with them
in the manner in which
we are accustomed in
the United States.
In addition, certain
United States tax provisions
regarding the classification
of trusts may require
that the jurisdiction
apply the principles
of chancery courts.
2.
Creditor protection:
Does the statute provide
adequate insulation
against creditors?
Each jurisdiction has
different Statute of
Elizabeth override
provisions and has
different procedures
and standards of proof
to enforce judgments
within its jurisdiction.
3.
Tax consequences: The
tax consequences of
settlement in a specific
jurisdiction should
be verified. Normally
there is not a tax
treaty. Most jurisdictions
have little or no tax
initially but some
jurisdictions impose
higher taxes once a
tax holiday is over.
4.
Transfer Statute: The
transfer statute of
the host jurisdiction
must be checked to
verify that the domicile
can be quickly and
automatically transferred
in the event of an
event of Duress.
In
addition, other factors
such as cost and availability
of international communication
links and the jurisdiction's
history of political
stability should be
considered.
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