Basics on Asset Protection and Offshore Trust in the Cayman Islands
An offshore account is the most common method employed for protecting an asset. A trust is an arrangement where a person transfers his assets to the possession of a financial institution who then assumes the responsibility towards the asset and its beneficiaries.
Offshore asset protection trusts (OAPTs) are arrangements wherein a trust is settled with an offshore institution where favorable secrecy and trust laws have been applied. In settling a trust in places like the Cayman Islands, Switzerland and other financial havens, it becomes almost impossible to raise a claim on your asset even in the event of great financial pressures.
A trust basically revolves around three parties. The grantor or settler, the trustee and the beneficiary are the three separate entities that make up a trust setup.
The grantor or settler is the entity who settles the trust. The grantor transfers assets and properties to the trust. The trust becomes the legal owner of assets that the grantor agrees to transfer. The grantor could even be a person, an institution or a company.
The trustee is a person or an institution who accepts and becomes the legal owner o the assets placed under the trust. At the same time, the trustee has the responsibility to take care of the beneficiaries of the trust depending on the contract agreed upon by the grantor and the trustee.
The beneficiaries are the ones who reap the payment and other substantial benefits from the trust. A beneficiary could either be a person like a wife, offspring or any member of your family. It could also be an institution or a company.
An OAPT is basically created for asset protection and in most cases for the benefit of your love ones. Financial centers like the Bahamas or the Cayman Islands are ideal places to settle trust because of laws protecting institutions in these locations.
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