Living with Financial Safety

A Model Offshore Trust can work a revolution in your financial life. It allows you to plan your affairs with the confidence that what you earn and accumulate will go for the purposes you intend — not for taxes, not for malicious lawsuits and not for the “urgent public need” the politicians may discover next week — and it assures a measure of privacy for at least part of your finances.

Sharing the Benefits

It is for you, the Grantor, to decide who shall belong to the Beneficiary Class. Anyone you include will be eligible to receive distributions and other benefits.

In most cases a Grantor includes the Grantor’s Spouse, children and all further descendants.

(In the Model Terms of Trust, “Spouse” means at any time the person to whom you then are married, or the person to whom you were married at the time of your death.)

You almost certainly should include yourself in the Beneficiary Class. Once the Trust has been established, you cannot add yourself or any other individual to the Beneficiary Class — although, as Grantor, you have the power to remove members from the Beneficiary Class.

As Grantor, you (and your Spouse, if also included in the Beneficiary Class) may have priority over all other members. The Trustee is authorized to apply the Trust Fund primarily for your needs (present and future) not met from other sources.

If you wish, you can include one or more charities, schools, churches or other “public benefit” organizations in the Beneficiary Class. Doing so allows the Trustee, in consultation with the Protector, to make gifts to the organizations so named. Including at least one U.S. and at least one non-U.S. public benefit organization in the Beneficiary Class may, in some circumstances, provide the Trustee with valuable tax-planning flexibility. If you include a tax-exempt public charity in the Beneficiary Class, you as Grantor can direct the Trustee to make contributions to it.

With the consent of the Trustee, you as Protector can add a U.S. or foreign public benefit organization to the Beneficiary Class at any time. As Grantor, you can add any tax-exempt public charity (that was in existence at the time your Trust was established) to the Beneficiary Class even without the Trustee’s consent.

NEXT: Your Living Trust

A Model Offshore Trust is a companion, not a replacement, for your living trust.

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