In my day to day operations as a lawyer here in Belize, I am constantly searching for ways to best protect my clients’ interests. When speaking with my clients and assessing their needs my firm tailors a solution that suits the client’s’ current requirements, as well as looking to the future.
In recent years we have used a combination of tools including International Business Companies (IBCs) and Limited Liability Companies (LLCs) among other structures to achieve the best result for our clients in terms of asset protection, but also in guarding their right to privacy. The various legal structures available in Belize offer all of this and more.
In recent times there has been a greater need identified on both protecting existing assets today but also looking to the future and the legacy that clients would like to leave. Coupled with privacy and tax concerns, Wrobel & Co., Attorneys-at-Law decided to apply for (and was recently granted) a license to create International Trusts. This article aims to outline some of the reasons why trusts and Belize International Trusts, in particular, may be the strongest form of asset protection available, and how they might apply to your situation.
Trusts, in various forms, have been in existence since Roman Times. Fideicommissum, as it was known in its earliest forms was the way in which wealth and assets were passed through generations. The English translation for the words that form Fideicommissum are fides which translates to trust, and committere which translates to commit. This forms the basis of what all modern trusts aim to achieve. Trusts, and trust laws have continued to be developed and strengthened throughout modern history. Trusts are common now in most jurisdictions whose legislation has been developed on the basis of British Common law.
Belize, as I will demonstrate throughout this post, has some of the most robust trust legislation worldwide. Our trust laws here in Belize are based on the Guernsey trust laws of 1989, with various enhancements and modifications to make a Belize International Trust one of the best forms of asset protection available. Belize trust law was established in May 1992, with significant amendments in 2007.
For the uninitiated, a trust typically has three main and a couple of minor players:
- The Settlor (the person or entity who creates the trust)
- The Trustee (the person or entity who manages, protects and preserves the assets held by the trust) – The trustee is prohibited from using the trust’s assets for their own benefit.
- The Beneficiary (the person/s or entity/ies who receives the benefits, proceeds and or dividends of the trust in due course). Note: It is possible to name the settlor as a beneficiary of the trust.
- The Protector (the person or entity who supervises the trustee) – This is an optional player in the trust who is able to provide assurances to the settlor that the trust assets are being managed in a prudent manner. In extreme cases, the protector has the ability to remove or replace the trustee.
- The Trust Agent (A requirement of trusts in Belize is to have a trust agent resident in Belize) – The trust agent will provide the essential details of the trust to the trust registry, all other details of the trust are kept solely with the trust agent and trustee.
The benefits of a Belize International trust are many and varied depending on your personal circumstances. I would encourage you to book an appointment with both a legal and tax expert to carefully assess your situation. Having said that, some of the advantages of a Belize International Trust are as follows:
- Confidentiality (Details of a trust are confidential in nature, they are registered by the registrar of International Trusts in Belize, but these records are not accessible except in cases of criminal investigations)
- Asset Protection – Trusts provide an extra layer of protection for assets in cases of litigation etc. Assets held by a trust are no longer owned by an individual.
- Tax Free – Income generated and distributed by trusts in Belize will not be taxed in Belize.
- Estate Tax Planning – As the assets of a trust are not owned by individuals, a trust can prevent court probate procedures which can be both costly and time consuming. When a settlor passes away, the trust remains and continues to operate as per the settlor’s wishes. Through the effective use of a trust, a person can adequately plan for the future wellbeing of their loved ones. A Belize International trust is what many consider to be one of the best vehicles available for making arrangements of this kind.
- Preservation of Wealth – Following on from the previous point. Belize International Trusts are an excellent vehicle to ensure the continued preservation of wealth for future generations. The settlor of the trust can specify payments that can be made to the beneficiaries at whatever interval and amount that is deemed necessary.
- Avoidance of Forced Heirship – Again, as assets are separate from the settlor, and are not deemed part of their estate in the event of their demise assets held within a Belize International Trust will not be subject to forced heirship rules. Put simply, a Belize International Trust may fulfill the role of a Last Will and Testament, sans the onerous regulations that oftentimes apply to these legal documents.
- Foreign Ownership – Belize is one of a few jurisdictions worldwide that allow foreigners to create and operate offshore trusts.
- Belize Has English as Their Official Language -This fact cannot be understated in its importance. This reduced need for translations and the associated costs and time can mean that a Belize International Trust can be a much more efficient and clearcut prospect than its counterparts in non-English speaking countries.
The crux of a Belize International Trust is this: The legal title (ownership) of an asset is no longer owned by an individual, but by a trust. The control of the said asset/title is also separate from the benefits derived from the asset. This has several advantages for the beneficiaries of trusts depending on various factors. Please feel free to contact our office to discuss your specific scenario. The staff at Wrobel & Co., Attorneys-at-Law is well versed in all aspects of law applicable to Belize and would be more than happy to analyse your personal situation and propose a tailored solution to fulfill your needs and wishes.
We hope this article has given you an overview of the features and benefits of a Belize International Trust. The information provided in this article is of an educational nature only and does not constitute financial or tax advice. Please contact a professional attorney and tax advisor in your jurisdiction to seek your own advice.
Belize features a climate conducive to private banking, international business companies (IBCs), limited liability companies (LLCs), shelf companies, offshore foundations, offshore trusts, and other international financial mechanisms that provide a confidential, safe home for your money. Small wonder that Belize is considered one of the best countries for offshore accounts and offshore banking in the world.