Ask a specialist about the most widespread trust type established in offshores – just to make sure he would mention a common law-based trust (which is actually a discretionary trust). This structure is a highly useful instrument for managing and protecting property. An option by default is to establish a standard common law (English law) trust in St. Kitts and Nevis. However, this insular state offers an exceptional structure for asset protection purposes: it is called the Nevis International Exempt Trust.
What do we mean by a discretionary trust? A form of an entity where you (the settlor) transfer the wealth to the trust to be under the trustee’s full administration. You lose direct control of your property, so now it can’t be taken away from you by creditors (and in many cases even by court decision). You execute a document called a trust deed in which you list the beneficiaries, while the trustee distributes the benefit of using the assets at his discretion (and by virtue of the deed).
A well-designed trust has several objectives as part of its strategy aimed at assets protection:
- Separates you from your property to make sure that no external persons would claim assets from you
- Simplifies taxation – you no longer pay property taxes (as the property is “not yours”), it is done by a trust instead (and there is not always a need to pay)
- Different people and even groups can be appointed beneficiaries of the Nevis trust – for example, in some cases, you or your grandchildren who have not yet been born can become ones
- The inheritance question: you can use a trust to decide for yourself to who you transfer the inheritance and how you do it, and taxes will be disproportionately lower in this case than if you transfer inheritance under ordinary laws
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What Benefits do the Best Lawyers See in Nevis Trusts?
Trusts are registered to protect wealth and Nevis is the best of its kind. It will ensure you remain protected against future creditors, former spouses, and disgruntled beneficiaries. Even a court has no power to convince your trustee to put its property in the wrong hands.
The Nevis International Exempt Trusts are of particular interest, and here are a bunch of reasons why:
- Local managers do not accept the decisions made by foreign courts. A foreign creditor should win the respective court case here in Nevis to make a Nevis trust satisfy his claims.
- A deposit of $100,000 should be paid in advance to the Nevis Minister of Finance before a lawsuit can be initiated. Until then, the case will not be given any consideration.
- In a local court, it is the prosecutor who will have to prove guilt, not vice versa, when the accused is obliged to prove his innocence.
- In addition, the justification should be at the level of “beyond reasonable doubt”, which is a very high level typically used in criminal proceedings. It really gives the potential claimant a hard time, which serves well for your protection.
- The time limit for filing claims is 1-2 years. In other words, if a creditor claims ownership of an asset within a Nevis trust, he should file an application within 1-2 years from the date of the asset transfer.
For this reason, it is important to set up trusts in advance: despite a really short limitation period for a Nevis trust, if a person attempts to set up a trust at the time of the prosecution, this will be considered a violation of the law regardless of jurisdiction.
Taking Advantage of your Trust in Nevis
Organizing an international offshore trust in Nevis is just one technical step. What you really need is to get the maximum benefit from the newly-created structure, which is possible under two conditions:
- Use of a local company (IBC, LLC) as a managing structure (you can register your company or engage a professional to serve as your trustee)
- Preparation of an individually worded trust deed
The trust deed is an essential document: its purpose is to be the “constitution” of the trust relied upon by the trustee for decisions on the preservation of property, as well as payments in the interest of beneficiaries.
The Trust Deed includes:
- Purposes for which the trust is created
- Intentions that the settlor wants to accomplish
- List of beneficiaries – not only by name but also by beneficiary group, especially in the case of multi-generational trusts
- Rules/recommendations for wealth distribution (to the beneficiaries on behalf of the trust)
- And much more
This document must be executed on an individual basis. Standard solutions do exist, but each capital owner has his own nuances and they should be taken into account. A standard deed will not protect you against all attacks – therefore, be sure to agree on the details with the trustee in advance.
A Few Additional Rules for Creating an Exempt Trust in Nevis
The Nevis International Exempt Trust shall be deemed a duly established entity if the requirements below are met:
- No less than 1 trustee is a trust company set up in Nevis (we can provide assistance in selecting or establishing one)
- The trust settlors and beneficiaries are residents of other countries, not Nevis
- The trust possesses no real property in Saint Kitts and Nevis
You can find out additional information about the registration of a Nevis exempt trust aimed at your property protection by reading articles on our portal or (a much quicker option!) at a personal meeting that you can schedule via info@offshore-pro.info.
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