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ESTATE PLANNING Offshore trust structures beyond tax planning


In the last few decades, there has been a substantial growth in the use of trusts in international wealth structuring. Although tax related motives have traditionally been cited as a reason for creating a trust, the reality is that trusts have always been used for benefits that go beyond the tax angle.


F


or many wealthy families, trusts are able to offer a long term planned ownership structure for holding complex assets including those that may not be compatible with direct


personal ownership. Using an offshore trust, families can consolidate their worldwide assets into a long- term structure that will allow them to manage their


assets holistically from a single point of reference. From a risk management viewpoint, the flexibility of the trust structure has given many families in the emerging markets a means to secure their assets against the threats of political and social unrest. Using a well-structured trust, families with active businesses can also use trusts to ring fence part of their assets to provide for minors and dependents in the


event of future creditor claims. In terms of estate planning, instead of leaving


assets to his children under a will, a patriarch can use a trust to defer the inheritance of certain assets to certain beneficiaries. This is particularly useful where there are heirs who are minors, and the patriarch does not wish for them to inherit until certain criteria that may be fulfilled only after his lifetime, are met. By using the ownership structure of the trust,


families can avoid the need to apply for probate, often in multiple jurisdictions, on the death of the patriarch. In some cases probate proceedings may take considerable time to conclude, especially in cases where there are assets in several jurisdictions.


88 FAMILY OFFICE: ASIA TOMORROW


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