Your Own International Trust (March 2015)

YOUR OWN
INTERNATIONAL
TRUST
For Maximum Financial Safety
By Terry Coxon
YOUR OWN INTERNATIONAL TRUST
Topic 1
MAXIMUM FINANCIAL SAFETY
Nothing will bring you and your family closer to complete financial safety than a
lawful international trust. This report explains how international trusts work and how
you can establish your own trust to protect your wealth and free it to grow faster.
A properly designed, properly managed international trust gives you:
• A
sset Protection. An international trust ends your exposure to potential
future lawsuits. The trust makes it extremely difficult for a lawsuit winner
to reach the assets you’ve protected—which comforts you every day while it
discourages lawsuit predators from ever making you a target. Asset protection
also means you can’t be wiped out through a no-warning seizure by a runaway
government agency.
• I ncome Tax Savings Now. Being international, your trust has ready access to
legitimate tax-saving opportunities that most US investors miss out on. An
international trust opens those opportunities to you, to shrink your tax bill on
investment profits.
• I ncome Tax Savings Later. After your lifetime, your trust disconnects from the
US tax system. It can invest tax free all around the world—even in the US—for
faster compounding and unhindered growth in family wealth.
• E
state Planning Advantages. An international trust easily accommodates all
the standard estate planning strategies—and then does much more. It eliminates
the fear of giving away too much too soon (the number-one barrier to effective
estate planning). And, because your trust eventually will disconnect from the
US tax system, it solves your family’s estate planning problems once and for all.
It won’t be part of the taxable estate of any future generation—ever.
• F
inancial Privacy. An international trust sets up a zone of privacy that gives
you greater control over who does and who does not have access to the details of
your financial life.
2 I N T E R N AT I O N A L M A N . C O M
Topic 2
PARTICIPANTS
The easiest way to understand an international trust is through the roles of the
four participants.
• Th
e Grantor is the person who starts the trust by transferring legal ownership of
the assets he wants to protect. If you decide to establish an international trust,
then you will be the Grantor.
• Th
e Beneficiaries are the people you designate as eligible to receive cash
distributions and other benefits from the trust. Most likely, you will include
yourself, your spouse, and your children and further descendants. You can even
include the grandchildren and great-grandchildren who will be born after your
lifetime. If you wish, you can include other relatives and friends. And you can
include charities and religious organizations. You have complete freedom to
decide who the Beneficiaries will be.
• Th
e Trustee of your international trust is a non-US financial institution (probably
a bank or trust company) that accepts legal responsibility for administering your
trust, for safeguarding the assets you transfer to it, and for distributing those assets
to the Beneficiaries (including you) when they are needed.
• Th
e Protector monitors the Trustee’s performance, advises the Trustee, and gives
the Trustee information about the needs and circumstances of the Beneficiaries.
The Protector also has the power to replace the Trustee with another financial
institution, if that ever becomes necessary. The purpose of naming a Protector for
your trust is to make sure that the Trustee never loses sight of your intentions.
Topic 3
TWO KEY PROVISIONS
The relationship among the four participants is set out in a written, legally enforceable
Trust Instrument. That document defines the rights retained by the Grantor, the
rights of the Beneficiaries, the duties of the Trustee, and the powers of the Protector.
To deliver maximum asset protection and tax savings, the Trust Agreement needs two
key provisions. It should say that the trust is “irrevocable” and that it is “discretionary.”
Irrevocable means that you don’t keep the right to order the Trustee to wind up
the trust and immediately return all the assets to you. It is critical that you not have
such a right. If you did, a court could order you to revoke your trust and retrieve the
assets—making them easy pickings for anyone who had won a lawsuit against you.
Your trust can’t protect you unless it is irrevocable.
(Because the trust is irrevocable, you generally should include yourself as one of the
Beneficiaries. This allows the Trustee to make distributions to you.)
Discretionary means that the Trustee has a duty to decide which Beneficiaries
receive distributions or other benefits, how much they receive, and how and when
they receive them. With such a discretionary provision, no Beneficiary owns a fixed,
percentage share of the trust. No Beneficiary has, for example, a right to receive 50%
of the income or 25% of the principal. A discretionary trust protects the Beneficiaries,
because it creates no rights that a Beneficiary (including yourself ) can be compelled to
sign over to a creditor.
An international trust that is both irrevocable and discretionary is a thick wall against
potential future lawsuits, and those same two provisions lead to valuable tax advantages.
But they also are highly cautionary for the Grantor. How can the Grantor be confident
that the Trustee will use its discretion correctly? Putting that concern to rest is one
reason for naming a Protector for your trust and giving him the right powers.
Topic 4
THE PROTECTOR
For you to reach the confidence level you’ll insist on before establishing an
international trust…
• Th
e Protector should have the power to confer with the Trustee on any matter
pertaining to the trust, including investment policy and distributions to Beneficiaries.
• Th
e Protector should have a broad power to fire the Trustee and replace it with
another independent trustee.
• Th
e Trustee should be authorized to rely reasonably on the information and
advice it receives from the Protector.
Together these three features ensure that the Trustee will give proper weight to the advice it
receives from the Protector and never lose sight of your (the Grantor’s) intentions.
A conscientious Trustee welcomes the information it receives from the Protector about the
needs and circumstances of the Beneficiaries. That information makes the Trustee’s job
easier. And almost any Trustee wants to continue to earn its trustee fees, so it doesn’t want
to get fired by the Protector—which could easily happen if it disregards the Protector’s
advice. A Trustee also wants to protect itself from complaints and legal claims, which it can
do by reasonably relying on the information and advice it receives from the Protector.
Selecting a Protector
Who should be your trust’s Protector? Because the role is so important, most Grantors
decide to keep it for themselves. They also keep the power to appoint their own
successor as Protector, so that they can decide which one or more of their heirs should
inherit the job of monitoring the Trustee.
But it isn’t necessary for you to be the Protector if you don’t want to be. The
alternative is to make someone else the Protector—such as an international attorney
or a second non-US trust company.
Protecting the Protector

Because the Protector’s role is so important, the Trust Instrument should specify that the
Protector may act only of his own free will—especially if you are going to be the Protector
yourself. Such an “anti-duress” provision protects against any attempt to use a US court to
force the Protector to replace the Trustee with an institution located in the US.
Topic 5
SOURCE OF ASSET PROTECTION
In principle, your trust frustrates lawsuit predators by putting your wealth under the
protection of a Trustee outside the US. Having transferred assets to your trust, you no
longer are the legal owner, so you no longer have the ability to surrender the assets to
a lawsuit winner—so no one can compel you to do so. The Trustee holds the assets,
and it is obligated to use them exclusively for you and the other Beneficiaries you
named when you established the trust—not for your creditors.
The Trustee is protected from coercion by US government agencies, because it is not

in the US. It is subject to the laws of its own country—not to US laws. It is able and
obligated to say “No” to any US court order aimed at undermining your trust.
As Grantor, you are protected because your trust is irrevocable. You can (and should)
obey any order you receive from a US court and still be confident that your trust is safe.
As a Beneficiary, you are protected because your trust is discretionary. You can (and
should) obey any order you receive from a US court and still be confident that your
rights as a Beneficiary can’t be touched.
As Protector, you are protected by the Trust Instrument’s anti-duress clause. You can
(and should) obey any order you receive from a US court and still be confident that
only your voluntary actions will influence the Trustee.
Respect Existing Debts

To make this protection actually work, it is important not to go too far in transferring
assets to your trust. You must not transfer more than some fraction of your net worth.
In other words, you should hold back at least enough assets to cover all your existing
and reasonably foreseeable obligations. An international trust is not a device for
defeating existing creditors or for ducking obligations you already suspect may be
headed your way.
And unless there is a practical reason for doing otherwise, the Trustee should hold
trust assets through a custodial account at a foreign bank—not in the US in the name
of your trust. This guards against the arbitrary actions of any US government agency
that might be determined to seize trust assets despite established legal norms.
Topic 6
INCOME TAX SAVINGS
Your international trust should be located in a country that levies no income tax.
Nonetheless, being US citizens or residents, you and the (other) Beneficiaries still
will be subject to US tax rules. One set of income tax rules about international trusts
apply during your lifetime. Different rules will apply after your lifetime.
During Your Lifetime

If your international trust has any Beneficiaries who are US citizens or residents (the
usual case), it initially will be classified as a “grantor trust.” This means you must
include all the trust’s income, deductions, etc. on your own personal tax return. It
also means that your dealings with your trust are completely income tax free. You
can transfer assets to the trust (even if they are highly appreciated) tax free. And
you can receive distributions back from the trust tax free. During your lifetime, it’s
almost as though, for income tax purposes, your international trust were a simple
brokerage account.
Because of the grantor trust rule, the mere structure of the trust has no effect, good or
bad, on your personal income tax bill. Instead, during your lifetime, the income tax
advantages come from the way the Trustee plans and manages your trust’s investments
(assuming you give the investment management job to the Trustee).
For an investor, tax planning means deferring tax bills as long as possible and favoring
untaxed appreciation instead of income that is taxed as it’s earned. Most investors do
at least a little tax planning. But a qualified Trustee in certain non-US jurisdictions
is likely to be far more effective at it than the average investor, since an alert Trustee
has advantages most individuals lack. That’s why it is important to pick the right
Trustee—one with the following qualifications:
• F
or the Trustee, tax planning is a full-time business. It can devote more
attention to the task and budget more resources for the best professional advice.
• Th
e Trustee operates in a zero-tax environment. It is comparatively simple for
the Trustee to structure tax-saving transactions between trusts it manages for US
clients and other, non-US clients that are not subject to US tax rules.
• Th
e Trustee has ready access to tax-favored investment opportunities that are
effectively blacked out in the US by securities laws, insurance regulations, and
other artificial barriers.
For Your Heirs

After your lifetime, the income tax rules change. Your trust becomes completely
foreign. Neither it nor any of the Beneficiaries will be subject to tax on trust income.
Wealth will grow faster, because the trust’s earnings can accumulate and compound
tax free. This makes a dollar left in an international trust far more valuable to your
heirs than a dollar they inherit directly.
Distributions to Beneficiaries after your lifetime are partly taxable and partly tax free.
The tax-free portion represents the assets in your trust at the end of your lifetime. The
taxable portion represents later trust earnings.
In some cases, your heirs can achieve even better tax results by dealing with the trust
(buying, selling, borrowing, lending, etc.) than by receiving direct distributions. And
in nearly all cases, the Trustee can improve the tax results for Beneficiaries who receive
distributions through the way it manages the trust.1
1 F
or certain technical reasons, tax planning is easier after the Grantor’s lifetime. But it remains
important, especially if the trust is used to accumulate investment profits.
Topic 7
ESTATE PLANNING ADVANTAGES
Someday, your estate could be taxed at a rate as high as 40%. Your heirs would lose
much of what you’ve built up.
If concern about estate tax leads you to visit an estate planner, you probably will
hear about:
• Lifetime credit amount ($5.4 million)

• Annual gift tax exemptions ($14,000 per recipient per year)
• Crummey trusts (another way to use annual exemptions)
• Marital exemption (for gifts to your spouse)
• Marital deduction (for bequests to your spouse)
• QTIP trusts (to capture the marital deduction for money left in a trust)
• Life insurance trusts (to avoid estate tax on life insurance proceeds)
• G
rantor Retained Annuity Trusts (GRATs, to efficiently remove an unlimited
amount of wealth from your taxable estate)
These are the standard tools of estate planning, the techniques designed to reduce
the eventual tax bill on your estate. You readily can apply any or all of them with an
international trust. But an international trust lets you do even more.
Your trust makes estate planning easier. With an international trust, you can remove
assets from your taxable estate and still keep them available for your own support, in
case you need them later. This frees you to do a thorough, energetic job of estate
planning without fear of planning yourself into the poorhouse by letting go of too
much too soon.
A thorough estate plan may call for transactions between you and other family
members. You can simplify those transactions by wrapping them in your international
trust. Because of the grantor trust rule, transactions between you and your trust have
no income tax effect. Thus the trust lets you pursue powerful transactions for estate
planning without entangling yourself in unwanted income tax complications.
And an international trust is the grand slam of estate planning: It eventually

eliminates the need for estate planning. Because the trust is discretionary, it won’t be
included in the estate of anyone in a later generation. In other words, your trust leaves
the estate tax system forever.
Topic 8
FINANCIAL PRIVACY
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 international 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). These forms are mandatory. It is by
filing them 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 US 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.
Topic 9
WHAT YOU CAN PROTECT
Your international trust can protect almost any kind of asset—cash, stocks, bonds,
precious metals, foreign currencies, even real estate and business assets.
• T
ransferring cash and securities to your trust is easy. For cash, simply write a
check. For stocks or bonds, mail the certificates to the Trustee or instruct your
broker to make the delivery.
• I f you own stock in a private corporation, you can protect your shares by
transferring them to your trust.2
• T
o protect real estate, you’ll probably need to use a limited liability company.
First, transfer the real estate to a limited liability company formed under the laws
of your own state. You’ll be the LLC’s manager and keep direct management
responsibility for the property. But your trust will be the LLC’s owner.
• Y
ou can transfer the value of an unincorporated business to your trust in the
same way, by using a limited liability company.
2 Y
ou should not transfer shares in a sub-chapter S corporation to an international trust. Doing so
would disqualify the corporation from the favorable tax treatment available under sub-chapter
S. However, there are special strategies for using an international trust to protect the value of a
sub-chapter S corporation.
Topic 10
INVESTMENT MANAGEMENT
A properly structured international trust gives you wide freedom in arranging for
investment management.
• I f you want to make investment decisions yourself, advise the trustee to open
a brokerage account for your trust and appoint you as the trading advisor. You
will deal directly with the broker and give the buy orders and the sell orders.
• I f you want to maintain even closer supervision over trust assets, transfer
your investments to a limited liability company that you manage. Then transfer
ownership of the LLC to the trust.
• I f you want to put an outside advisor in charge, advise the Trustee to open a
managed account for your trust with the advisor you select.
• I f you want to reduce your income tax bill, pick a Trustee that is alert to the
importance of tax planning and let it manage the investments.
With an international trust, you can have any type of investment management program
you want. You also gain access to investment opportunities not available in the US.
Topic 11
THE NEXT STEP TOWARD REAL SAFETY
By Nick Giambruno
I hope you learned as much about real financial protection as I did by reading Your
Own International Trust.
The core message is emphatic. If you’re looking for the strongest protection for your
assets—protection that can’t be undone by any runaway government agency nor even
by the cleverest lawsuit attacker—an International Trust is the solution that fits you.
Nothing else comes close. If you’re looking for permanent protection from high taxes
on your capital, an International Trust is the solution that fits you. Nothing else comes
close. If you want to get ahead of the next round of new rules from Washington, an
International Trust is the solution that fits you. Nothing else comes close.
The list of the benefits an International Trust delivers is long and rich, and it includes:
• P
rotect your assets from potential future lawsuits. Your Trust can shut out all
future lawsuit predators.
• P
rotect your assets from seizure by arbitrary government agencies. Your
Trust follows the laws of the jurisdiction you choose—it’s not subject to the laws
where you live.
• P
rotect family wealth from gift and estate taxes. With an International Trust,
you get estate-planning advantages that are impossible with any stay-at-home
estate plan. Equip your family with an International Trust, and even a billion-
dollar fortune can pass from one generation to the next without loss to estate tax.
• P
rotect assets from possible future exchange controls, capital controls, or other
desperate government measures, such as forced sales of privately owned gold. The
licensed institution that serves as your trustee is beyond the reach of any asset grab.
• P
rotect future generations from estate tax and from the full burden of
income tax. Your Trust eventually disconnects from the US tax system, so you
could be the last person in your family who needs a plan for estate tax. And
for future generations, your Trust will be an ideal vehicle for compounding
investment returns free of current income tax. Better yet, for future generations
it can lawfully be silent and lawfully invisible.
• P
rotect your peace of mind by knowing that the politicians’ next big idea can’t
damage the wealth you’ve protected with your Trust.
It all sounds so wonderful. But how do you make it happen?
I’ve found a resource that will show you exactly how to use an International Trust
to achieve all those advantages for yourself and your family even while you stay
completely within the rules. It’s what I’d been hoping for. As soon as I saw the
working draft, I knew I wanted to publish it with the International Man.
What has really opened up the world of International Trusts is Terry Coxon’s
International Trust Library. It’s a turnkey solution to a previously complex and
expensive undertaking. There is simply nothing else like it in the marketplace.
The International Trust Library will give you everything you need to understand
and create an International Trust, the most powerful asset protection vehicle on the
planet.
It includes all the documents you need to actually establish your Trust, including the
legally binding Trust Deed. Because the documents have already been prepared and
are ready to use, you’ll save thousands of dollars in legal fees.
If you’re interested in using an International Trust to protect your wealth, check out
the International Trust Library.
Sincerely,
Nick Giumbruno
Senior Editor, International Man
Act now to get the International Trust Library.
DISCLAIMER: Casey Research, LLC does not provide investment, tax or legal advice, and nothing
in this e-mail or any document found at InternationalMan.com should be construed as such. Before
undertaking any action, be sure to discuss your options with a qualified advisor.
The information contained within this article is based on the best research we could find as of the
date of publication. However, the world changes fast and information can become out of date
relatively quickly. So, two points... First, before undertaking any action described in this material,
please conduct your own due diligence and verify all facts. Second, if you happen to spot an out of
date fact or figure (or even suspect something is out of date or false), simply get in touch with us and
we’ll look into it. International Man is a network made up of some very smart people - tax specialists,
accountants, lawyers, analysts and many other talented individuals. As a group, we can create and
maintain a very accurate and highly actionable resource for internationalization.
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YOUR OWN

A properly designed, properly managed international trust gives you:

Protecting the Protector

The Trustee is protected from coercion by US government agencies, because it is not

Respect Existing Debts

During Your Lifetime

For Your Heirs

• Lifetime credit amount ($5.4 million)

And an international trust is the grand slam of estate planning: It eventually

It all sounds so wonderful. But how do you make it happen?

Act now to get the International Trust Library.

© Casey Research, LLC.

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