Introduction to Offshore Trusts - Our law firm creates International Trust Agreements which are signed between the law firm, the Trustor (the person to whom something is entrusted) and the client, the Trustee (one who entrusts). The Trustor, us, will manage the assets of the trustee, the client, according to the client's intents, wishes, and detailed instructions. The Trustee is not the signatory on the client's bank account, and only the Trustee's name appears in the bank records. This creates a strong barrier of protection.

Distress Clause - The Distress Clause is something of the descendant of the "Gullotine Clauses" in offshore banks that used to exist prior to 9/11. In such a bank account, if there was a request for information the bank would have to immediately move the money to a predetermined location, generally another offshore bank in a different jurisdiction. Again, they could be moved to avoid any kind of financial enemy getting their hands on the money.

Today, it is illegal for a bank to use this policy. It is not illegal for a lawyer to do so if the lawyer has signed a Trust Agreement with the trustee. This is done through a distress clause in the TA which states that the lawyer must take action to protect your assets if he feels that they are at risk. There are a few ways in which the lawyer can become aware of the risk or distress. He can be directly contacted and warned by you or a person included in your list of trusted people. Another way is to have a condition in the clause that states that if he receives any inquiry about the funds, he must immediately take action. In this cause, it may also be the bank or stockbroker that alert him. You may want the funds moved to another jurisdiction. In any case, the actions he will take, and when and how this can happen, are defined in the clause and are determined by the trustee. This clause is optional, but it is wise to include one in your trust agreement.

The greatest benefit is plausible deniability. For example, if you were ordered to repatriate the funds to your home country so that it could be confiscated, with or without due process, you could legitimately say that you cannot do so because the control of the assets is out of your hands. We, as your law firm, would happily confirm to the court that any kind of repatriation will not be possible because of the Trust Agreement.

Judges prefer not to play collection agent and would rather see the lawyers have a judgment and let them worry about collecting the money from the foreign jurisdiction.

Guatemala - We form these trusts in Guatemala, usually as part of a larger asset protection structure involving a corporation and bank account. Please call us if you have any questions.

http://www.guatemalalaw.org