Offshore company trusts are regular, conventional trusts that are formed under the specific laws of the offshore jurisdictions. Basically there are three parts involved in the functioning of the offshore company trusts : settlors, trustees and the beneficiaries.
The basic role of the settlors is to transfer the assets that will make the trust property on the trustees. The trustees will manage the trust property for the benefit of the beneficiaries. The majority of offshore jurisdictions modified their laws in the way to be more appealing for the settlors. These law and regulation modifications were minor modifications but they were enough to attract investors.
The offshore company trusts play a vital role in the asset protection planning. In the legal terms, the offshore company trust is a legal agreement between the settlor and the trustee. The trustee holds a certain amount of assets for the behalf of the settlor. The whole concept of the trust is made for the benefit of the beneficiary. The beneficiary is a third party who has benefits from the assets of the settlor.
There are many varieties of offshore trusts and they can range from verbal agreements to formalized arrangements. The legalized formal trust documents are called settlements or trust deeds. The offshore company trusts can be the following types:
- revocable or irrevocable offshore company trusts
- specific or discretionary offshore company trusts
- charitable offshore company trusts
- testamentary offshore company trusts
- protective offshore company trusts
- inter vivos trust
- spend thrift offshore company trusts and many more.