Belize Trust Formation for Immediate Asset Protection

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Belize Trust

Since 1990, with the passage of the International Business Companies Act, Belize has become renowned as a top offshore jurisdiction. Of all such jurisdictions, Belize trust law is arguably the best governing asset protection from lawsuits. This is especially true when it involves foreign judgments or third-party. Top  British and U.S. trust experts helped develop the trust laws of Belize.  To date, no Belize asset protection trust has ever been compromised.

Strong & Flexible Trusts

Two of the great advantages of a Belize asset protection trust are its strength and flexibility. We will discuss the strength of the Belize trust in great detail below. The biggest strength is that once you place assets inside of the trust, the trust immediately protects those assets.

Regarding flexibility. these trusts may include various asset protection clauses. Do you want estate planning so your children or others to inherit the trust when you pass? You can do so. Do you want to change your domestic trust into an offshore one?  You can do this also. There is no one-size-fits-all when it comes to investor needs, so Belize trusts appeal to a wide range of people. Belize trusts may also include automatic successor trustee and protector provisions.

Adding to the flexibility is the fact that Belize does not mandate a minimum amount necessary for trust creation. In addition, one can set up a trust in Belize in any currency. The Belize International Financial Services Commission (IFSC) regulates all trusts.

Belize map

About Belize

Located on Central America’s eastern shore, Belize is an independent, sovereign nation with a diverse population. Formerly the colony of British Honduras, Belize’s  official language is English, but Spanish is also widely spoken. It received independence from Great Britain in 1981. Thereafter, Belize realized the international financial services sector was one that could help diversify its economy and gain competitive advantage.

The government is a parliamentary constitutional monarchy, and Queen Elizabeth II is the official head of state. Meanwhile, the prime minister is the head of government.

A popular tourist destination, Belize sports an international airport and has first-rate telecommunications links. In addition, it has a excellent transportation system. Belize boasts a history of political and governmental stability. As such,  investors can feel confident conducting business here.

Mayan Ruins

Establishing a Belize Asset Protection Trust

Establishing a Belize asset protection trust is a straightforward procedure. Neither the settlor –the person or entity putting assets into the trust –nor any beneficiaries may reside in Belize. Belizean real estate assets cannot go into the trust.

The trust must name a trustee who is responsible for trust management. The only requirement per se is that a trustee is an adult of sound mind.

Under Belize law, all offshore trusts governed must have a trust agent resident in Belize. The trust agent’s office serves as the trust’s office.  In 2007, the Trusts Amendment Act became law. International trusts now require registration with the International Trusts Registry in the Office of the IFSC. Belize asset protection trusts have no minimum share capital requirement.

Settlors need provide only limited information when establishing a trust and filling out the application form. The necessary information includes:

  • Trust name
  • Trust type
  • Settlement date
  • Beneficiaries list (not displayed in the public records)
  • Trustee name
  • Trust agent name

The settlor must also disclose how they initially funded the trust. This can include cash, securities or real property. The Belize trust either names beneficiaries specifically, or generally, such as “all children and grandchildren.”

Belize Pyramids

The Protector (Optional)

The settlor has the option of naming a protector. A protector is an individual the trust names to act as an intermediary between the settlor and beneficiaries. Moreover, the protector can protect the trust from a “rogue” trustee and unsatisfactory management. A trust protector, by necessity, is an independent third party and not related to the settlor, trustee or beneficiaries.  Other than a relative, settlors may name anyone they please to serve in this capacity.

In addition, it is wise to not have the protector reside in your home country. The reason for this is that the judge can issue court orders to a protector who resides within his jurisdiction. In the United States, for example, this means the judge can give orders to anyone in the country. When naming a protector, the trust should also address how it compensates the protector.

Asset Protection Trusts

Belize Trust Setup

The trust agent keeps all other information regarding the trust. There is no need to disclose additional information to the Trusts Registry or make any other information public. Most importantly, the registry does not mandate the filing of the trust deed. So the information in the trust remains private to casual prying eyes. The trust agent must have the contact information, names and addresses and copies of passports for the trust’s principles; that is, the settlor, trustee, beneficiaries and optional protector.

Belize asset protection trusts are usually considered irrevocable. This means that one cannot readily change the terms of the trust, unless the trust expressly provides for revocation power.

The laws consider such trusts as Belize non-residents. Thus, it makes the Belize trust exempt from exchange control regarding trust property. That means it limits restrictions for transactions the trust carries out with other countries.

The settlor and the trustee must sign the trust deed. The trustee must sign the declaration of trust. If someone makes the signature outside Belize, notarization or the equivalent in the particular jurisdiction is necessary.

What Belize Trusts Can Do

Once the Belize trust is created, it can conduct business. Thus, it can hold a bank account, trade in securities, secure real estate investments and hold about any other type of property. For example, it can own gold, jewelry, art, antiques and any negotiable instruments.

The trust can make regular disbursements to you or family members. This may be for educational, medical and legal expenses; that is, as long as the trust permits the establishment of these disbursements. When the trust makes these disbursements, the payments are not subject to foreign currency controls.

Asset Protection Trust Definition

Immediate Protection

In some jurisdictions, timeframes in which a creditor can bring a fraudulent conveyance claim against trust assets. The timelines in other jurisdictions may last from two to six years. That is not the case in Belize. It does not have any such time period in which trust assets are vulnerable to such claims. As soon as you establish the trust and transfer assets into it these assets are protected from fraudulent conveyance claims. That is provided the trust is established correctly. Whether or not the trust was created after the claim or judgement happened is irrelevant. The protection is immediate.

The Belize Trust Act, Chapter 202, Part I Section 7 (6) Where a trust is created under the law of Belize, the Court shall not vary it or set it aside or recognise the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another jurisdiction in respect to,

(a) the personal and proprietary consequences of marriage or the termination of marriage;

(b) succession rights (whether testate or intestate) including the fixed shares of spouses or relatives; or

(c) the claims of creditors in an insolvency.*
*Insolvency means the inability to pay one’s debts.

So, (c) above is a sort of “catch all.” Let’s suppose you do not have the money to pay your debts except that which resides in your trust. Belize trust law says, “Too bad, creditor. You’re out of luck.” Thus, your trust fund helps you averts the your judgment scot-free.

privacy

Privacy

There are no legal requirements for auditing Belize trust accounts. Trusts are not open for public inspection. Naturally, you can authorize the trustee or trust agent in writing that a person may inspect the entry of the trust on the register. Thus, your trust is as anonymous as possible.

courtroom

Belize Court Jurisdiction

Belize’s Asset Protection Trust Act goes to great lengths to reserve jurisdiction over Belize trusts to the Belize courts. For example, when the SEC applied for an order to compel a Belize trustee to hand over specific assets. It also requested that the trustee supply information. The Belize Supreme Court refused it on the grounds that it contravened the Act. As one judge noted, “Section 7(2) of the act provides that only a Belize court has the power to declare a Belize trust invalid. By Section 7(6), Belizean trusts are granted specific immunity against the judgments of foreign courts or claims based on the law of any foreign jurisdiction.

“In a jurisdiction such as Belize, which offers international investors confidentiality and protection of their assets against foreign litigants and which has passed law towards those ends, it is important that judges, mindful of the Legislature’s intention as set out in the law, support these principles of confidentiality, inviolability and exclusivity of jurisdiction.” The bottom line is that Belize will not set aside a trust or the assets transferred into it as long as the trust was legally established.

However, the country has its own fraudulent conveyance law, which does apply when actual intent is proven. Belize also has its own law regarding international trust invalidation. While foreign judgments are not enforceable against a Belize trust, claimants can commence new proceedings in Belize. Of course, this is subject to the country’s laws. Belize courts are debtor-friendly. So the likelihood of the success of such a challenge is small. In fact, we know of no case where such a challenge has reached trust assets.

offshore corporation

IBCs

Belize asset protection trusts are often used in conjunction with a Belize International Business Company. Because the trust holds the shares in the IBC, the trust owner receives additional legal benefits. The most popular IBC in Belize is the Belize LDC. The Belize LDC is a limited duration company. It is basically an LLC that you can renew every 50 years. So, you have your Belize trust own 100% of a Belize LDC. You are the manager of the Belize LDC. When there is a legal attack, your trustee can step in as manager of the company and protect you. Thus, the LDC gives you the remote control into the trust assets while the waters are calm. Then makes for a very easy transition when legal storms arise.

tax simplicity

Tax Exemption

A trust and its property are exempt from income and business tax. The trust is also exempt from estate, inheritance, gift or succession taxes. Belize considers transactions the trustee carries on the trust’s behalf as stamp duty exempt. The use of such a trust minimizes your taxes and costs. The US, UK, Canadian and Australian governments, for example, tax their people on worldwide income. So, whereas there are no taxes in Belize, you will likely owe tax back home.

estate planning advice

Estate Planning

Belize asset protection trusts make good personal estate planning tools. First, the creation of a trust helps you avoid probate. Probate creates a public record and may take considerable time. But you, on the other hand, will have more confidence that your assets remain private. Plus they will end up distributed exactly as planned once you are gone. Only those assets you do not place in the trust are subject to the probate laws of the country in which you reside. Thus, assets outside of the trust assets need to go through the probate process.

There is no forced heirship in Belize. In some countries, the law does not permit the exclusion of certain blood relatives from an estate. This is a concept they call forced heirship. In certain ways, establishing an asset protection trust for estate planning is similar to creating a last will and testament. That is, it divides the estate exactly as you want. However, it is not subjected to rules that could thwart your plans on how you want to divide your assets.

Under Belize law, it is also possible for non-residents to establish private foundations for their estate planning needs. Foundation endowments are exempt from creditor claims. Plus they are exempt from interference from family members of founders and beneficiaries of the foundation. Plus legal proceedings in other jurisdictions will not affect them.  Some people put associate a foundation with a trust in a somewhat similar fashion as the LDC/Trust relationship above.

Trust Help

What to Do Now?

Do you want to form a Belize Trust? Do you need asset protection from lawsuits? If so, utilize the consultation form on this page or make contact using one of the phone numbers above.

Belize Trust Frequently Asked Question

How quickly does a Belize trust protect my assets from lawsuits?

Immediately. Other jurisdictions have a statute of limitations giving judgment creditors time to challenge the transfer of assets into a trust. Belize has eliminated the time to challenge asset transfer. Thus, the Belize asset protection trust protects assets immediately.

How long does it take to create a Belize trust for asset protection?

Setting up a Belize trust is a smart move for those looking to protect their wealth from lawsuits and creditors. These trusts can be set up in a matter of weeks, and once activated, start protecting your assets immediately. That said, we do not make timeframe promises because the timeline also hinges on you providing the legally required due diligence or know-your-client (KYC) documents on a timely basis.

When you work with experienced professionals, like those at Asset Protection Planners, you can usually set up your Belize trust in two to four weeks. This timeline can vary slightly depending on the complexity of the trust, the size of your estate, the level of detail you provide in any documents, and the number of beneficiaries.

While setting up your trust, we go through a detailed process to establish its legitimacy. The primary steps involved in trust creation include:

  • Enlisting the help of a knowledgeable asset protection team (Total Time: 1-4 days)
  • Planning with our trustee company / law firm (Total Time: 1-7 days)
  • Transferring assets into the trust (Total Time: 1-2 weeks)

Before you do anything, you’ll want to hire a reputable asset protection professional to help guide you through the Belize trust setup process. Hiring one only takes a few hours. Working with an asset protection professional will ensure that your assets cannot be reached by any lawyers who may be after them.

Next, appoint a trustee company. An experienced asset protection planner will typically have a vetted, reliable trustee ready to appoint. Trustees in Belize need to be licensed to ensure that they understand how to meet the standards of operating a trust. Selecting a trustee usually involves researching and vetting various trustees to get a better sense of their reputation and expertise. Fortunately, if you have already retained services from an asset protection professional, they can do much of this work on your behalf.

Finally, you’ll execute the trust deed and open a bank account. We typically set up an LLC of which the trust owns 100%. Then we open the bank account in the name of the LLC. Most commonly, we utilize international institutions, such as those in Switzerland and Luxembourg, since local courts have jurisdiction over local bank accounts. The trust settlor is often the initial signatory on the bank account. This gives the settlor control when the legal waters are calm. It also makes for an easy transition when under legal attack. This is because the trust company can step in as LLC manager to protect your assets, as needed.

Finally, transfer your assets into the trust. It usually takes the banks 24 to 48 hours to wire funds internationally. Once the transfer is finished, the ownership of all your chosen assets shifts from you to your trust. This is why it’s so important to have a reputable trustee. The assets you can transfer include valuable assets such as bank accounts and investments. We also employ strategies to secure real estate, business assets and personal property.

After completing all these steps, you will have made your assets virtually untouchable. Belize has a unique legal jurisdiction that is specially designed to protect trusts from creditors and attorneys. In fact, since 1990 when the International Business Companies act was passed, we are aware of no Belize asset protection trust that has ever been compromised. The jurisdiction of Belize specifically states that any assets transferred into a trust within the country are protected from creditor claims so long as the trust was not set up with criminal intent.

In addition to comprehensive and immediate asset protection, Belize also gives trust holders a great degree of confidentiality. Belize trust details, including your identity and the identity of any trust beneficiaries, are not public information.

All told, spending four weeks to protect your assets from creditors is well worth the time and expense. In the long run, the cost of setting up one of these trusts is minuscule compared to the potential losses you could incur if a creditor seized unprotected wealth.

Procedure and Timeline to Create and Maintain an Asset Protection Trust in Belize
Outlined below is a step-by-step breakdown of establishing and maintaining a Belize asset protection trust. The time needed to complete each step can vary, and may exceed the listed time range. Steps 1-12 are establishment-focused, while steps 13-21 relate to the maintenance of the trust:

  1. Consult an asset protection professional: Work with a person or company with experience setting up Belize trusts, such as Asset Protection Planners. (Total Time: 1-2 days of research)
  2. Select a trustee: With the help of your asset protection professional, identify a trustee in Belize who is licensed and well-regarded. (Total Time: 1-7 days)
  3. Draft trust deed: Create the trust deed and other requisite legal documents with the help of your asset protection professional. (Total Time: 7 days)
  4. Document assets: List and document any assets you plan to include in your trust. (Total Time: 7 days)
  5. Asset valuation: Review and document the value of every asset you are adding to the trust. This step is done concurrently with documentation and deed drafting. (Total Time: 7 days)
  6. Execute trust deed: Formally execute the trust deed with the help of a professional. (Total Time: 1-3 days)
  7. Register the trust: Complete any required registration processes to comply with Belizean law. (Total Time: 1-2 days)
  8. Opening bank accounts: Open bank accounts in the name of the trust, if necessary. (Total Time: 2-3 days)
  9. Transfer ownership: Legally transfer the ownership of assets to the trustee. (Total Time: 7 days)
  10. Deposit assets: Deposit funds, and transfer physical assets into the trust accounts. (Total Time: 2-3 days)
  11. Notify beneficiaries: Inform beneficiaries about the trust and their entitlements. (Total Time: 2-3 hours)
  12. Document transfers: Properly document and record any transfers to ensure the assets remain protected. (Total Time: 2-3 hours for every new transfer)
  13. Monitor trust compliance: Have your asset protection planner regularly review and ensure compliance with Belizean regulations and laws.
  14. Review and amendments: Occasionally review and make necessary updates to the trust documents.
  15. Trustee reporting: Review the regular reports on your trust that the trustee sends.
  16. Beneficiary updates: Keep beneficiaries updated on any major changes or distributions.
  17. Annual review: Conduct annual reviews with your asset protection professional to maintain the trust’s effectiveness.
  18. Regulatory changes monitoring: Stay informed about any changes in Belizean laws affecting asset protection trusts.
  19. Estate-planning integration: Integrate your Belize trust with any estate-planning strategies.
  20. Long-term planning: Develop a long-term strategy to ensure the continued protection and management of trust assets.