Financial Privacy
With an International Trust

To increase your financial privacy, simply locate your trust in a country where privacy is the norm.

In most of the zero-tax jurisdictions you might consider for an offshore trust, privacy is respected by law.  A financial institution or professional that discloses your private information to third parties would be violating its legal duty.

And in most jurisdictions that are appropriate for an international trust, financial privacy is a matter of business necessity.  Local institutions couldn’t attract business if they failed to safeguard the privacy of their clients.

During your lifetime, however, financial privacy won’t be complete.  Because you must include the trust’s income on your own personal tax return, there are IRS reporting rules. You are required to report transfers to your trust on IRS Form 3520 and to report the trust’s activities each year on Form 3520-A.  You also must file form FBAR (which deals with foreign financial accounts) and Form 8938 (which deals with foreign financial assets). These forms are mandatory.

It is by filing the reports correctly and on time that you keep your international trust completely non-controversial – so that it truly is a source of protection and comfort and not a source of risk and worry.

After your lifetime, the trust becomes completely foreign.  No one in the U.S. will have a reporting obligation for it.  Beneficiaries will have to report distributions they receive, as indicated earlier.  But the trust itself can remain silent for as long as the Beneficiaries find it advantageous.

NEXT:  Assets You Can Protect with an International (Offshore) Trust