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Belizean Trust FAQ
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| Belizean Trust FAQ | | |||||||||||||
Date: | | 05/14/2000 | | ||||||||||||
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Belize Court Makes Landmark Decision Protecting Privacy Belize City, Friday, January 20, 1995 In a landmark decision asserting Belize's sovereignty as an offshore financial jurisdiction, the Supreme Court of Belize upheld the country's confidentiality laws by revoking a previous court order set in motion by the Securities and Exchange Commission of the United States requesting that confidential documents, belonging to Swiss Trade and Commerce Trust, Ltd., be handed over to them. In the case, Securities and Exchange Commission (SEC) vs. Swiss Trade and Commerce Trust, Ltd., Banner Fund International, Lloyd Winburn et al, Supreme Court Justice Troadio Gonzalez ruled that documents held by the Belize court belonging to Swiss Trade and sought by the SEC, be immediately returned to Swiss Trade and Commerce Trust, Ltd. Lawyers for Swiss Trade said that what this means for Belize is that this aspect of confidentiality, which is an important feature of the offshore industry, has been upheld. "What this means is that any party who seeks to destroy the concept of confidentiality would have to contend with our system, which has demonstrated its ability to uphold the relevant laws," Attorney Oscar Sabido said. The decision is expected to have major international repercussions as the world financial community looks to Belize and its new offshore services industry. "It is certainly a shot in the arm of the offshore industry because of the fact that it is an industry which is just beginning," Sabido said. A country's ability to assert its sovereignty without the interference of outside forces is a major deciding factor in choosing a place to invest and protect personal property. When asked for his comment related to the decision, Lloyd Winburn, Director of Swiss Trade & Commerce Trust, Ltd., in Belize, stated, "The Court's decision confirms our reasons for establishing our company in Belize originally. The Law related to confidentiality has been tested and found to be not lacking clarity and strength. Any other ruling by the Court would have sent a signal throughout the financial world that Belize could not be trusted to protect assets, provide confidentiality of transactions or otherwise serve the needs of those who seek to do business away "From their home jurisdiction." The decision clearly shows that the SEC stepped out of bounds in trying to obtain confidential information, the matter having been urged on both sides by learned Queen's Council. The case arose after the SEC [bureaucrats] appeared at Swiss Trade's office on March 3, 1994 with the expectation that they would be able to just take the files and leave the country with them, with no regard whatever to Belizean law. The quick reaction of company employees prevented any further disregard for the law on the part of the SEC [terrocrats] and their Belizean lawyer, Eamon Courtenay, who previously had been the lawyer for Swiss Trade. F.A.Q. FREQUENTLY ASKED QUESTIONS (FAQ'S) OR ALL YOU NEED TO KNOW ABOUT THE BELIZE PROSPER TRUST Q - WHAT IS A TRUST AND WHEN DID IT BEGIN? A - Originally developed in the English Courts in Medieval times. In essence a trust is an arrangement, an agreement whereby one person a "SETTLOR" causes a second person, "TRUSTEE" to become the legal owner of property which he holds for the benefit of a third person the, "BENEFICIARY". The Trust property may include anything which is capable of being transferred such as land, buildings, money, shares, bonds (including shares of offshore companies). Q - WHY WOULD I WANT TO SET UP A TRUST IN AN OFFSHORE COUNTRY? A - If you like the idea of having a Trust let me explain why another country could be advantageous to your financial well being. In the united States of America, there are so many UNCLEAR rules, statutes and codes that people believe are all laws. Everyone seems to believe in different ways when it comes to the laws of income tax reporting, citizenship and sovereignty, to name a few. This creates a host of problems for those of us that insist on living under Common Law as we do. Even though a Common Law Trust is written to be used as the basis of business dealings and ownership of assets, you may end up dealing with certain uneducated people anyway. This can cause you undue hardship and inconvenience. However, with an Offshore Trust, if a problem arises, you simply notify the interested parties that they're dealing with an Offshore entity and that eliminates half of the problems they think exist. The other half of the problems will probably go away once they realize they'll have to hire a Belizean attorney to pursue it any further. Q - WHY WOULD I WANT TO CHOOSE BELIZE OVER ANY OTHER COUNTRY? A - The Belizean Law on Trusts, specifically called the Belize Trusts Act, 1992 is EXTREMELY CLEAR on what is allowed and what is not. It makes writing an Offshore Trust much more practical. It leaves very little room for uncertainty. In 1992, Belize rewrote their laws to be more clear, concise and above all, more in tune to what people desire of an offshore entity. They have some of the most liberal laws I've seen for Offshore Trusts that give you so much more flexibility in what can be done. They are an English speaking country. They are actively seeking the offshore business, and rapidly becoming on of the best tax havens! Their confidentiality and privacy laws have been recently tested and the Belize courts have stood squarely behind them. Q - HOW CLEAR IS THE BELIZEAN LAW ON TRUSTS? A - The law of Belize is VERY CLEAR AND UNDERSTANDABLE in all facets of dealing with Trusts. It eliminates the confusion that exists in Trusts written in the United States of America. Q - ARE THERE ANY HIDDEN COSTS THAT I WILL INCUR IN SETTLING AN OFFSHORE TRUST IN BELIZE? A - No! The only additional cost is a nominal annual maintenance fee paid to the Trustee. Q - WHAT IS MEANT BY AN "EXEMPT" TRUST? A - It simply means that you are not taxed by Belize on the income that the Trust earns. The Trust is not taxed on capital gains nor is any duty charged on any estate through the Trust. Q - WHAT DETERMINES AN "EXEMPT" TRUST? A - The SETTLOR, PROTECTOR and BENEFICIARY may not be resident of Belize, any portion of any calendar year, in order to remain an exempt Trust. Q - HOW SAFE IS AN OFFSHORE TRUST? A - The risk you take with any Offshore Trust is that the country is going to remain stable enough for you to maintain constant access to your dollar account. Because Belize has a stable economy and was founded on English Common Law, its biggest advantage is it's clarity in the system of developed law. As a former British Crown Colony, they adopted the Common Law of England and thereby inherited what some believe to be the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence, which is the most outstanding creation of equity, the Trust. Q - WHO KEEPS COPIES OF THE TRUSTS THAT I CREATE? A - The only copy is the one you have. Q - HOW PRIVATE ARE THE RECORDS? A - Think about it. The records are extremely private and confidential and protected by the laws of Belize. If anyone wants to pursue the Trust with a lawsuit, they'd have to rely on information being available in Belize. They would have to track down the Trustee of the Trust, wherever they may be and pursue in the courts of Belize and subject to the laws of Belize. The jurisdiction may be moved by the Trustee and the Protector to further confuse the issue. Q - DO I NEED A TRUSTEE FROM BELIZE? A - No, that is not necessary. Under the terms of this Trust, a resident of Belize is not necessary to perform the role of the TRUSTEE. The TRUSTEE can be resident of any other country in the world. Q - CAN I STILL USE MY OWN ASSOCIATES TO FILL THE KEY POSITIONS OF THE TRUST? A - Yes, however, we do not recommend that you take this approach. Our Trustee has been selected after years of due diligence and we stand behind him 100%. Q - DOES THE DEATH OF ANY PERSON AFFECT THE TAXES OF THE TRUST? A - No! The Trust is not liable for any estate, inheritance, succession or gift tax or duty by reason of any death in a calendar year. Q - WHO IS THE TRUSTEE OF THE TRUSTS WE CREATE? A - PILL recommends that you appoint PIL, Pierre Gauthier, MBA as managing director. However, you may appoint anyone you wish. Q - IS THERE A NEED FOR ME TO OBTAIN AN AGENT IN BELIZE? A - No, PILL has already done this. Q - WHO HAS A VESTED INTEREST IN THE TRUST FUNDS? A - Only the TRUSTEES, not individually, but collectively as the Board of Trustees. Q - CAN THE TRUST BE IN EXISTENCE FOR MORE THAN 120 YEARS? A - No. 120 years is the limit. It can be established for a shorter period of time but the maximum is 120 years, with no exceptions. Q - HOW DO I GAIN CONTROL OF THE TRUST? A - You should not be in control, that is what makes a trust vulnerable. You should only use the "Letter of Wishes" to your Trustee. Q - IS THIS AN IRREVOCABLE OR REVOCABLE TRUST? A - This is an IRREVOCABLE Trust, meaning that the SETTLOR can not change his mind and take control over his property again or withdraw the terms of the contractual agreement between him and the TRUSTEE. Q - IS THIS TRUST THE SAME AS A PURE TRUST THAT WE WOULD FIND IN THE U.S.? A - No, this can not be compared to the Pure Trust offered in the U.S. because Belizean Laws are written differently and they purposely address new issues that are of concern to modern business persons. Belizean Law was completely revised in 1992 for the specific purpose of attracting new Trust business that would satisfy those modern requests and situations. Q - WHAT IS THE JURISDICTIONAL LAW OF THE TRUST? A - The jurisdictional law of the Trust is the Trust Act of Belize, 1992. Q - WHAT IS MEANT BY A "SPENDTHRIFT" OR "PROTECTIVE" TRUST? A - In the event that the BENEFICIARY becomes insolvent or any part of his property becomes liable to seizure or sequestration for the benefit of his creditors, the Trust has the right to minimize the BENEFICIARY's interest in Trust funds to a degree necessary to prevent such action from hindering the smooth operation of the Trust. It is designed to protect the BENEFICIARY against his own incompetence or inability to properly handle money or property. Q - HOW PROPRIETARY IS THIS INFORMATION IN THE TRUST DOCUMENT? A - The information contained in the Trust Minutes is VERY CONFIDENTIAL AND PRIVATE! The TRUSTEE is NOT allowed to disclose this information to outsiders without just cause. Q - WHO IS ENTITLED TO SEE THE TRUST DOCUMENTS? A - Since you have the only copy you can decide who to distribute it to. Q - HOW IS THE "INTEREST" OF A BENEFICIARY CLASSIFIED AND DEALT WITH? A - The "interest" is classified as "personal property" and can be sold, traded, charged, or otherwise dealt with in any manner whatsoever. Q - WHO MAY BE THE SETTLOR? A - Any person who has, under the law of Belize, the capacity to own and transfer property may be the SETTLOR of the Trust. The SETTLOR may also be the TRUSTEE, BENEFICIARY, or PROTECTOR, although this is not recommended. Q - DOES THE SETTLOR HAVE TO LIVE IN BELIZE? A - No, The SETTLOR cannot be a resident of Belize to comply with the "exempt" ruling. Q - WHAT ARE THE SETTLOR'S DUTIES ONCE THE TRUST IS FORMED? A - The SETTLOR's position is this: He is the person who initially wants to settle the Trust. He contracts with the TRUSTEE to accept his initial contribution of money into the Trust. After that, the SETTLOR steps out of the picture. He no longer has any active management duties or ties to the Trust funds. Q - WHO MAY BE THE TRUSTEE? A - Any person, who has, under the law of Belize, the capacity to own and transfer property, may be the TRUSTEE of the Trust. The TRUSTEE may also be a corporate or artificial entity. The TRUSTEE may also be the SETTLOR, BENEFICIARY, or PROTECTOR. Q - DOES THE TRUSTEE HAVE TO LIVE IN BELIZE? A - No, The Trust document specifically states that the TRUSTEE does not have to be a resident of Belize. Q - WHAT ARE THE TRUSTEE'S DUTIES ONCE THE TRUST IS FORMED? A - Once the Trust if formed, the TRUSTEE has the daily duty of maintaining the Minutes concerning any activity of the Trust. If the Trust decides to purchase or sell some of it's assets, these things must be recorded in the Minutes of the Trust. If the TRUSTEE should so choose, he may decide to delegate some of the day-to-day operations of maintaining the Trust to another person called the General Director or the General Trust Manager. If no other person is appointed, the TRUSTEE retains those duties. Q - IS THE TRUSTEE LIABLE FOR ANY MISTAKES OR BAD JUDGMENTS OF THE TRUST FUNDS? A - No, not really. As long as the TRUSTEE can show reasonable care in selecting his options and making decisions, he is not personally responsible to the Trust for any shortcomings from those bad judgments. Q - WHAT IS THE MINIMUM AND MAXIMUM NUMBER OF TRUSTEES ALLOWED? A - At least one (1) and not more than four (4) TRUSTEES. Q - WHO MAY BE THE BENEFICIARY? A - A BENEFICIARY may be identified by name or by reference to a relationship to some other person, whether living or not at the time of creation of the Trust. A BENEFICIARY may also be a certain "class" of individuals. A BENEFICIARY may also be the SETTLOR, TRUSTEE OR PROTECTOR; although this is not recommended. Q - DOES THE BENEFICIARY HAVE TO LIVE IN BELIZE? A - No, in fact, the BENEFICIARY cannot live in Belize. Q - WHAT IS THE BENEFICIARY'S OBLIGATIONS OR RIGHTS ONCE THE TRUST IS FORMED? A - Since the Trust assets are not yet vested in the BENEFICIARY, he has no voice in the management or the day-to-day operations of the Trust. This is also because of it being a "spendthrift" type of Trust, which is designed to protect the BENEFICIARY more than a normal type of Trust. The BENEFICIARY does, however, have "Interest Bearer Shares" that can be traded, put up as collateral, sold, or dealt with in any manner whatsoever. This does give the BENEFICIARY some present benefit of being a BENEFICIARY. Q - CAN A BENEFICIARY BE REPLACED ONCE APPOINTED? A - Yes, The TRUSTEE reserves the right to replace or appoint additional BENEFICIARIES at will. Most offshore Trusts have this stipulation that people are not aware of. The Protector may also perform this function. Q - ARE THERE ANY ADDITIONAL RIGHTS OR POWERS DUE A SHAREHOLDER? A - The BENEFICIARY may give to the TRUSTEE, a letter of wishes with regard to the exercise of any functions conferred on the TRUSTEE by the terms of the Trust. But remember the TRUSTEE does not have to respect those wishes and will not be accountable in any way for his failure or refusal to do so. Without the BENEFICIARIES being vested of Trust assets, they have no further obligations or powers until such time as the assets are distributed. Q - WHAT HAPPENS TO THE BENEFICIARY's RIGHTS UPON HIS DEATH? A - Any rights bestowed upon the BENEFICIARY because of his holding any Interest Bearer Shares, will terminate upon his death unless a "Transfer Of Beneficial Interest Upon Death" form is on file with the Board of Trustees. Q - HOW DOES A BENEFICIARY ARRANGE TO HAVE THAT FORM ON FILE? A - The BENEFICIARY simply needs to request a form from the Board and complete it as soon as possible thereafter. The BENEFICIARY shall appoint whomever they shall choose to fill the position of Successor-Beneficiary. Once that form is on file, the transfer of rights is automatic upon the death of the BENEFICIARY. Q - WHO IS THE PROTECTOR? A - PILL is the PROTECTOR of the Trust. Q - WHAT IS THE FUNCTION OF THE PROTECTOR AFTER THE TRUST IS FORMED? A - The PROTECTOR's job is to watch over the TRUSTEE and make sure they perform their role as per the wishes of the SETTLOR. The PROTECTOR has the power to remove and/or appoint a new or additional TRUSTEE. The PROTECTOR may also be the SETTLOR, TRUSTEE or the BENEFICIARY. Q - CAN THE PROTECTOR FIRE A TRUSTEE FOR NO REASON? A - Yes, The PROTECTOR can get rid of a TRUSTEE if this becomes advisable. Q - DOES THE PROTECTOR HAVE TO LIVE IN BELIZE? A - No, In fact, the PROTECTOR cannot live in Belize in order to satisfy the requirement of being an "exempt" Trust. Q - WHAT IS A GENERAL TRUST MANAGER OR A GENERAL DIRECTOR? A - These are different titles that refer to the same basic position. At any time, the TRUSTEE may choose to delegate the day-to-day duties of managing the Trust Estate to a qualified TRUSTEE or a qualified non-trustee. The title of that person may be the General Trust Manager or General Director. An independent contractor relationship shall exist for the position to take effect. Q - DOES THE GENERAL TRUST MANAGER HAVE TO LIVE IN BELIZE? A - No, There is no residency requirement for the GTM or the GD. Q - WHAT ARE THE ON-GOING DUTIES OF THE GENERAL TRUST MANAGER ONCE THE TRUST IS FORMED? A - If the position of the GTM or GD has been established, it is assumed that they will have full control of the day-to-day operations of the entire Trust Estate, including, but not limited to operating the checking account. Q - WHY IS AN INDEPENDENT CONTRACTOR AGREEMENT NECESSARY FOR THE POSITION OF GENERAL TRUST MANAGER? A - This is so that the Trust does not have to establish an employer-employee relationship, thus saving the expense of paying unemployment taxes and workmen's compensation taxes. Q - CAN ANY OF THE OFFICERS HOLD MORE THAN ONE POSITION IN THE TRUST STRUCTURE? A - Yes, as noted above, all the positions: SETTLOR, TRUSTEE, BENEFICIARY, and PROTECTOR can be held by one (1) person or entity. Q - CAN AN OFFICER RECEIVE COMPENSATION FOR MORE THAN ONE POSITION? A - Yes, the Trust Indenture allows for remuneration for a Trust officer holding more than one position within the structure. Q - BECAUSE CERTAIN TRUST OFFICERS ARE VESTED OF THE INTEREST OF THE TRUST ASSETS, DOES THAT MAKE THE TRUST ASSETS A PART OF THEIR INDIVIDUAL ESTATE? A - No! Under no circumstances are the assets of the Trust Estate to be included in the estate of the Trust officers, individually or separately. Q - IF A TRUSTEE BECOMES INSOLVENT OR HIS PROPERTY IS LIABLE TO DISTRAINT, SEIZURE OR SIMILAR ACTION, CAN THE CREDITORS ATTACH TRUST ASSETS? A. Absolutely not! The Trust is a distinct and separate entity, apart from the TRUSTEE's personal estate. Q - CAN A MULTI-LAYERED STRUCTURE BE SET UP WITH A BELIZEAN TRUST? A - Absolutely! There are numerous ways to establish a multi- layered structure. The easiest is setting up a second Trust as the BENEFICIARY of the first Trust. Then setting up a third Trust as the BENEFICIARY of the second Trust. You can have one umbrella Trust having multiple subsidiaries off of that or have one of the Trusts be an underlying umbrella by being the BENEFICIARY of multiple brother-sister Trusts. Everybody has his or her own preferences. Q - CAN THE BENEFICIARIES FORCE A TRUST TO TERMINATE AND DISTRIBUTE THE FUNDS? A - Normally they could, under a Belizean Trust. But since we wanted the TRUSTEE to remain in total control, we elected to write this as a "spendthrift/protective" Trust that excludes the ability of the BENEFICIARIES to take control with a majority vote. Q - WE ALREADY ESTABLISHED THAT THE TRUSTEE DOES NOT HAVE TO HONOR A LETTER OF WISHES FROM THE BENEFICIARIES. DOES THE TRUSTEE HAVE TO HONOR A LETTER OF WISHES FROM THE SETTLOR? A - Again, no. The TRUSTEE has total control of the Trust Estate and does not have to report or justify to anyone, his actions, so long as he does not endanger his fiduciary relationship he has with the BENEFICIARIES. Q - CAN I GET A CREDIT CARD TO USE IN MY OWN COUNTRY TO DRAW UPON THAT TRUST ACCOUNT? A - Yes, we have connections that will allow you to set up a debit card account whereby you can transfer funds from the trust to the account and draw upon it throughout the month. Q - IF I START WITH U.S. $1,000 IN MY ACCOUNT, WHAT WILL MY LIMIT BE FOR SPENDING? A - You will start with a drawable balance of U.S. $500. That's the most lenient ratio we've seen so far. You may deposit in advance in this account and convert card into a debit card. Additional funds tranferred to the card will allow additional spending. Q - DOES THE TRUST NEED AN EIN OR A TIN TO OPEN THIS ACCOUNT IN IT'S NAME? A - No, There is no identifying information necessary. Q - IS MY SOCIAL SECURITY NUMBER REQUIRED IN ANY WAY TO OPEN THAT ACCOUNT? A - Not at all! Your personal social security number is never required on any paperwork whatsoever to accomplish this task. Q - HOW SAFE ARE THE FUNDS IN THE BANK? A - Belize's economy is quite stable and we do not foresee any problems with their monetary system or we wouldn't be establishing this program at this time. We've looked at a number of offshore countries and we are confident in having chosen Belize as our first choice. Q - DO I STILL MAINTAIN CONTROL OVER MY FUNDS? A - Yes, and no! Your Trustee has control! Your access is through a "Letter of Wishesî. Q - WHO HAS ACCESS TO THE TRUST FUNDS? A - Only the TRUSTEE of that Trust will have access to the funds. Q - FOR WHAT REASON WOULD I WANT TO "REGISTER" MY TRUST IN BELIZE? A - I really don't know why someone would go through the trouble of establishing a private relationship through a Trust, settled in a foreign country, and then go ahead and register it with that government if they didn't have to. You may have different thoughts on this though. You have a choice. Q - CAN I CONDUCT BUSINESS IN THE COUNTRY OF BELIZE UNDER THIS TRUST AGREEMENT? A - No, you cannot conduct business with a Belizean resident nor may the Trust own any Belizean real property under the Trust name. There are, however, several ways to get around that by using what is known as a "flushing method" to pass funds to anyone at anytime. You really should discuss this with the Trustee. Q - CAN I CONDUCT BUSINESS IN MY OWN COUNTRY UNDER THE NAME OF THE TRUST? A. Absolutely! Simply treat this like a real person and you will understand more of how a Trust can operate. The Trust can buy, sell and trade assets at any time or start up any new business activity that the TRUSTEE sees fit and appropriate. Q - DO YOU OFFER AN INVESTMENT PROGRAM FOR OUR TRUST FUNDS TO OBTAIN BETTER THAN AVERAGE RATES OF RETURN? A - Yes, most certainly! The Trustee may offer advice, but the final decision is yours. Consult with the Trustee on an individual basis for more details. Q - WHAT IS THE EASIEST WAY TO TRANSFER A HOUSE INTO THE TRUST? A - The easiest way is to use something similar to a "Quit-Claim" deed. This relinquishes your ownership in the real property but does not remove your obligation to the "note" in which you promised to pay the entire balance. As long as the payments are still being paid, the Mortgage Company should not call the note due. Q - WHAT IS THE EASIEST WAY TO TRANSFER AN AUTOMOBILE INTO THE NAME OF THE TRUST? A - One of the easiest ways to avoid the minimum tax on the transfer of the title is to go down to the registration / tag office and pay the small fee to "add" a name to the title. Then, you wait about 30 days and go back down and pay the fee again to "remove" your name from the title, thus leaving only the Trust name on it. Q - HOW DO I TRANSFER PERSONAL GOODS AND HOUSEHOLD FURNISHINGS? A - Simply use a "Bill of Sale" form. It clearly states a value and date that the transfer was made. It is made a part of the Trust documents and Minutes, which become a part of the permanent record of the Trustactivities. Q - AS FOR BUSINESS TACTICS AND STRATEGIES, HOW CAN THIS BELIZE TRUST HELP ME? TRUSTEE can borrow funds in the name of the Trust. TRUSTEE and BENEFICIARY can borrow from the Trust. TRUSTEE can designate third parties to hold funds in their name if necessary. TRUSTEE can hire outside agents, etc. without previous permission. TRUSTEE can use Trust funds to buy anything he feels is necessary, including real property and the improvements thereon. TRUSTEE can make interest-free loans to people including the BENEFICIARY. TRUSTEE can provide Trust property (i.e. real property) rent-free to persons if necessary. TRUSTEE does not have to honor "letter of wishes" from either the SETTLOR or the BENEFICIARY, but he may do so. TRUSTEE may distribute Trust funds to any one Beneficiary as necessary. Anyone loaning or advancing funds to the Trust is not obliged to see the application thereof. Source: http://www.websitings.com/pill/index1.cfm | | | ||||||||||||
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