The most commonly found type of Trust in an offshore jurisdiction is the Common Law Trust, which is usually Discretionary in nature. This is an incredibly useful tool for estate planning and whilst there is the option to establish a standard Common Law Trust in Nevis, there is also an additional unique and beneficial option for asset protection purposes, known as the Nevis International Exempt Trust.
What Added Asset Protection Does a Nevis International Exempt Trust Offer?
Typically, a Settlor is looking for a safe and stable jurisdiction to maintain their assets with a potential additional consideration to seek to protect the Trust Property from future litigants, who may attack the Trust in the hope of setting it aside in order to have access to the Trust Fund.
An attempt to attack a Trust could come from an array of complainants such as; a disgruntled Beneficiary, a divorcing spouse or a future creditor.
In the case of a Nevis International Exempt Trust, the Law states that:
- A creditor must first pay a bond of US$100,000 to the Minister of Finance in Nevis, before bringing any action or proceeding against a Trust and before the Court will consider it.
- The burden of proof is placed completely on the complainant who must establish their claim "beyond reasonable doubt."
- No action or proceeding to set aside the settlement or by any person claiming to have had an interest in assets before they were settled in a Trust will be entertained by the Court if the action or proceeding commences two years after the settlement of the Trust or the settlement of the property.
These unique aspects of the Nevis Trust legislation combined with ensuring that the goals and intentions of the Trust are discussed with the Trustee at the outset, the three certainties are clearly in place, and that the Deed is properly drafted on establishment, will provide the Trust with a high level of protection against any potential attack and produce a robust asset protection structure to suit the Settlor's needs.
How to Help Ensure that a Nevis Trust is Set Up Correctly
Further information to help ensure that a Trust is set up correctly can be found in the following Dixcart Article:
Criteria to Qualify as a Nevis International Exempt Trust
In order to be classified as a Nevis International Exempt Trust, the Trust must meet the following criteria:
- At least one of the Trustees must be a Trust Company e.g. Dixcart Management Nevis Limited, licensed by the Government to undertake trust business in Nevis, or a corporation incorporated under the Nevis Business Corporation Ordinance (commonly known as a Nevis IBC); and
- The Settlor and Beneficiaries must at all times be non-residents of Nevis; and
- The trust property must not include any land in the Federation of St. Kitts and Nevis.
In conclusion, by selecting a Nevis International Exempt Trust as your estate planning vehicle to protect your assets and pass them on to future generations, you are afforded additional protective benefits to that of a Common Law Trust found in other offshore jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.