The Anguilla Asset Protection Trust is a fairly new concept. The Anguilla Trust Act of 2014 culminated many years of studying trust laws from several countries. This new law provides flexible usage of trusts. Several types of trusts are allowed including charitable purpose trusts, commercial trusts, spendthrift trusts, and asset protection trusts. Founders (Settlors) have the freedom to form different types of trusts. The new law also created a Protector (who could be the trustee) who has powers to replace the trustee and appoint new ones.
The new law abolished The Rule against Perpetuities which is an old British Common Law preventing trusts from eternal existence. Now, Anguilla trusts can be perpetual and can accumulate assets and income for as long as it chooses to remain in existence.
The Fraudulent Dispositions Ordinance is similar to other countries’ Fraudulent Conveyance Laws preventing settlers from creating trusts to hide assets knowing that legal claims against the settlor exists (or are expected soon) which could seize the assets to pay off court judgments and other debts. Anguilla requires creditors of the settlor to prove that the settlor was insolvent (financially broke) at the time he/she transferred assets into the trust, or became insolvent because of the transfers. In addition, the creditors must file their legal actions within three years from the day the assets were transferred to the trust. These are difficult hurdles for creditors to jump through before they can make any transfer of assets to the trust void. This makes Anguilla a tougher country for creditors to challenge transfers of assets to its trusts.
Unless a creditor can meet the above requirements, an Anguilla court shall not recognize the validity of any claim against an Anguilla Trust even by a court order from another country related to:
(a) Marital divorce;
(b) Inheritance succession rights;
(c) Creditors’ claims in a bankruptcy or debtors lawsuit; or
(d) any foreign government’s tax or duty
Background
Anguilla is located in the Caribbean being the most northern island of the Leeward Islands. English settlers colonized Anguilla in 1650 after sailing from nearby Saint Kitts Island. England administered Anguilla into the early 19th century. Anguilla Day is celebrated on May 30th when in 1967 the locals rebelled and defeated the Royal Police Force from St. Kitts and forced them from the island. England intervened and allowed secession meetings to drag on for thirteen years until December 19, 1980 Anguilla was declared a separate United Kingdom Overseas Territory with some autonomy.
Anguilla Asset Protection Trust Benefits
Anguilla Asset Protection Trusts receive many benefits including:
• Asset Protection: A Trust isolates assets from the reach of governments and lawsuits.
• Less Taxes:Since the Trust becomes the owner of its assets, all income generated from them and their increased value belongs to the Trust and not the settlor or the beneficiaries. However, U.S. citizens and everyone residing in a country which taxes all global income must report all income to their tax authorities when trusts provide them with income.
• Privacy: The Trust Charter which is registered with the government does not include the names of the Settlor or Beneficiaries so their privacy is assured.
• Lifetime Financial Management: Trusts centralize one’s financial affairs into a single platform making management of them easier.
• Preservation of Family Wealth: Trusts provide the settlor and his/her heirs complete control and protection of a family’s wealth for many years to come with an orderly process of distribution of assets upon the settlor’s passing away along with his/her spouse and heirs.
• Continuation of a Family Business: The Trust can own family corporations, companies, and business enterprises and effectively administer them while distributing profits as needed.
• Estate Planning: A Trust can work with a partnership or company or corporations to establish an effective estate planning strategy to avoid the pitfalls of wills or death without a will or one that is challenged by greedy relatives or ex-spouses in order to assure the rightful heirs get their fair distributions.
• Prevent Forced Heirs: Some countries have unfair inheritance laws and the right to challenge lawfully written wills by suspect heirs contrary to the wishes of the settlor. Trusts can avoid all of these malicious claims and prevent expensive Probate litigations.
• Pensions and Retirement Plans: Trusts can be used to establish private pension and retirement benefits for beneficiaries and family company employees.
• Charitable Causes: Trusts can fulfill settlors’ wishes in regards to charitable distributions.
• Low Registration Fee: Trusts only register once with the government with no annual renewal fees. The registration fee is $250 USD.
• Fast Registration: Registration can occur in less than 24 hours.
• English: The official language is English.
Legal and Tax Information
Trust Name
A trust can use any name in any language as long as it does cause confusion with other similarly named legal entities.
Office Address and Local Agent
While a trust is not a formal legal entity it will still need a registered agent and a local address for process of service or government notices.
Members
A trust has few members. The Founder (Settlor) creates the trust and funds it with assets. The Beneficiaries are usually heirs (current and future) and other family members and the spouse who are the recipients of the trust assets and income depending on how the Settlor wishes. A Trustee oversees and manages the trust on behalf of the beneficiaries. A Protector oversees the Trustee to make sure the wishes of the Settlor and the Beneficiaries rights are being fulfilled. The Protector can be the Settlor.
Directors and Officers
Trusts do not have directors or officers. However, they can have a Council of experts (CPA, lawyer, financial planners, etc.) who counsel the Trustee and guide the management of the assets pursuant to the Settlor’s wishes and are overseen by the Trustee and the Protector.
If the Trust opens an office to hire employees to manage the assets and make investments or collect income payments (rents, royalties, etc.) then officers to manage the office may be needed.
Authorized Capital <
There is no minimum required capital for a Trust to be established.Taxes
Trusts are not subject to taxes and Anguilla does not have a corporate or income tax for offshore corporations or Trusts.
Annual Fees
Trusts only need to register once with the government with no annual renewal fees. The registration fee is $250 USD.
Public Records
Only the Trust Charter is filed with the government registry which does not contain the names of the Settlor or the Beneficiaries whose names remain private.
Accounting and Audit Requirements
There are no requirements for accounting methods or any audit requirements. However, the Trust Charter normally has provisions regarding full accounting and acceptable accounting practices with the rights of the Settlor, Protector, and the Beneficiaries to inspect all records.
Annual General Meeting
There is no requirement for annual general meetings for a trust.
Time Required for Registration
A Trust can be registered with the government within 24 hours.
Shelf Trusts
There are no shelf trusts in Anguilla.
Form an Anguilla Asset Protection Trust Conclusion
Anguilla Asset Protection Trusts receive many benefits including: asset protection, fewer taxes, privacy, lifetime financial management, preservation of family wealth, continuation of family business, estate planning, retirement plans, charitable causes, low registration fee, fast registration, and English is the official language.
