What is the difference between a domestic trust and an offshore trust?

Domestic trusts and offshore trusts are two forms of asset protection used to shield an individual’s assets from creditors and other legal claims. In South Carolina, both forms of trusts can help protect assets from taxes, legal judgments, and other liabilities. A domestic trust is a trust established and regulated under the laws of the United States or one of the states within the U.S., and it is managed by a trustee who is subject to the jurisdiction of courts in the United States. The trustee has a legal duty to manage the trust assets in accordance with the trust agreement. With a domestic trust, the assets are legally owned by the trust, not by the individual who created the trust. An offshore trust is a trust established and regulated under the laws of a foreign country or foreign legal system. An offshore trust is a more powerful form of asset protection than a domestic trust because the assets placed in the trust are generally not subject to the laws and regulations of the United States. Furthermore, the parties to an offshore trust are not subject to the jurisdiction of U.S. courts. Because the assets are legally owned by the trust, not the individual who created the trust, the assets are protected from creditors, legal judgments, and other liabilities. The primary difference between a domestic trust and an offshore trust is the source of the trust law and the jurisdiction to which the trust is subject. Domestic trusts are governed by U.S. law and are subject to the jurisdiction of U.S. courts, while offshore trusts are governed by foreign laws and are not subject to the jurisdiction of U.S. courts.

Related FAQs

What is an account freezing order and how can it be used in asset protection planning?
Can I use an asset protection trust to protect my IRA or 401(k)?
What are the costs associated with asset protection planning?
What are self-settled trusts?
How can I transfer assets into an asset protection trust?
What is a domestic asset protection trust?
What is a spendthrift trust?
How do I choose a trust protector?
What is a family limited partnership?
What is an insurance trust and how does it work?

What is the difference between a domestic trust and an offshore trust?

Related FAQs

Related Blog Posts