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Belize offshore trusts
Belize's 1992 Trust Act has been touted as the most modern trust legislation throughout the world by the financial and tax planning experts in the offshore world. There's good reason for this. Belize's Trust legislation incorporated some advanced, new features unavailable in the trust laws of most other countries of the world.
The Offshore Trust or Exempt Trust as it is called in Belize offers particular tax advantages, provided two conditions are met. If in a particular year
- neither the creator of the trust nor the beneficiaries is resident in Belize; and
- the trust property does not include any land located in Belize the trust will then be exempt from payment of income tax, succession tax on death and stamp duty on transactions relating to such trusts.
Asset Protection
Belize is one of the few if not only country that has immediate protection against proceedings for fraudulent conveyances. There is no period of time that a Trust must be established for before it cannot be attacked. Such protection is immediate and while it can be set aside for duress, fraud, mistake, undue influence, misrepresentation or incapacity of the settlor it cannot be set aside even if made for the avoidance of creditors, spouse claims or other such matters.
Belize does not have a Reciprocal Enforcement of Judgments Act with the US that confers rights on a US court to enforce such US Court orders in Belize. Accordingly, such a claimant must reinstitute or duplicate any proceedings in Belize to access any assets held by the Belize Trust or Trustee in Belize.
Property provided by a settlor to an invalid Trust shall, subject to any order of a Belize Court, be held by the Trustee in Trust for the settlor absolutely, or if he is dead, as if it had formed part of his estate at his death.
A Trust in Belize does not have any corporate personality.
In Belize, there are no restrictions placed upon who may be a beneficiary, and even the Settlor can be placed as Beneficiary.
In Belize, there is no probate for Trust assets, no public record, no delays in distribution and no additional legal costs other than those incurred in establishing the trust. The current beneficiaries may receive income or the temporary use of the assets and may receive some capital before final distribution. In order to see why the Belize trust is for you, the following table illustrates how the Belize Trust compares to other trust formations in the Caribbean. The most important motivations for transferring assets in to a trust are:
- Inability to hold property personally.
- Preserving family wealth
- Fear that children may dispose of or manage assets unwisely
- Tax planning
- Flexible estate planning
- Protection from unrest, political and country risks, and future frivolous legal claims
Key Features of a Belize Trust
The Belize Trust legislation offers some of the most flexible and robust features available anywhere today. These include:
- the English law against perpetuities does not apply
- the powers and duties of a Protector are set out
- the status of a Letter of Wishes is clarified
- Trustee appointment and removal provisions are flexible and allow for the appointment of a sole Trustee
- the law contains provisions to simplify the drafting of Trust documents
- asset protection provisions so that a Trust may not be set aside on the basis of claims from creditors or the order of a
- foreign court on account of divorce, bankruptcy, etc.
- prospective Settlors may create protective Trusts in their own favour
- other types of Trusts may be recognised (e.g. the Islamic Waqf and the Chinese Family Settlement)
- registration of the Trust is optional
- both charitable and non-charitable Trusts are allowed
- non-charitable Trusts may have a maximum duration of 120 years
- Trustees may be given full discretionary powers