Many wealth solutions firms like Ora Partners and J.P. Morgan Chase can help with matters such as setting up offshore trust accounts and estate planning.
A few important reminders on offshore trusts
While offshore trusts can be incredibly helpful for both estate planning and asset protection, they have a number of limitations that should be heavily considered.
- Transfers to the trust are irrevocable.It means that the owners cannot later reclaim assets. Moreover, assets placed in an offshore trust are not always protected from claims by U.S. creditors as well as litigants.
- While trusts can also help with the taxes, S. citizens who establish offshore trusts won’t be able to escape all taxesas well. Earnings by assets in an offshore trust are free of U.S. taxes.
- On the other hand, S. citizens who receive distributions as beneficiaries still have to pay U.S. income taxes on the distributions, while U.S. owners of offshore trusts are also required to file reports with the IRS (Internal Revenue Service).
- The legal costs for setting up offshore trusts can also be quite significant. Trusts also need to pay ongoing fees to the trustees who are managing the trusts.
The expenses of establishing and maintaining offshore trusts mean these accounts are most suitable for business owners, certain professionals such as doctors with specialties, and, of course, individuals with a high net worth. These trusts are also ideal for people who are exposed a lot more to liability.
The most important steps in estate planning
The first thing to do when it comes to estate planning is to understand the consequences of not having an estate plan. People have to be sure and make sure that they are keenly aware of the turn of events that ensue upon their death, should it come without them having an estate plan.
Certain legally triggered outcomes happen due to a person’s death, especially regarding the assets they own and whom or where this will be turned over. It means they might or might not agree with where their assets are headed. That said, the good thing about being alive to create an estate plan is to exercise control even in their death.
Now that there’s a good and clear idea of what people want to happen after they die, it’s time to write down the estate plan. People have to account for everything that they own, and they need to decide where each of these items should go and to whom.
The essence of an estate plan is that it is played out in such a way that people want it to. It is created in the specifics of their will and the various accounts they hold, so it needs to be as detailed as it can be.
Estate plans have helped people keep orderly documentation, which has helped them act on things early. For instance, if they don’t want any particular individual to inherit one of their promising businesses, they might decide that it’s better to sell it off to their stockholders. As long as people live, an estate plan is something that they have the chance to go back to and rewrite to improve as they see fit.