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The following are three of the biggest reasons why one would choose a Belize asset protection trust established under the Belize Asset Protection Trusts Act.
1. Fraudulent Transfer Remedy Struck Down
Other popular offshore trust jurisdictions such as Cook Islands or Nevis, have a one- to three-year window of opportunity that permits a creditor to bring a charge of fraudulent transfer against a trust. (A fraudulent transfer, or fraudulent conveyance, is also what is referred to by the Statute of Elizabeth provision.) Other jurisdictions even allow for a six-year window. These jurisdictions may consider a fraudulent transfer charge that is brought against a trust established under their laws but only under strict and limited conditions. They aim to further mitigate this threat by imposing a statutory limit on the enforceability of a claim.
The framers of Belize trust legislation decided to adopt a completely different resolution to this matter. Belize trust legislation simply refuses to recognize any fraudulent transfer claims brought against a trust that has been properly set up within its jurisdiction. There is no window of opportunity and virtually no possibility that a fraudulent conveyance charge will ever be entertained against a Belize asset protection trust – period. The law has proven to be quite effective. Belize has been an offshore trust haven for well over 20 years. In that time, there has never been a successful attack on a Belize trust based on fraudulent conveyance.
2. No Issuance of Mareva Injunction
One of the most important considerations in deciding where you should domicile your trust should be the avenues of remediation that are available to a creditor that are also recognized by the courts in that jurisdiction. In other words, if a creditor wins a judgment against you from a court in your home country, will the laws where your trust is domiciled permit him or her to access the assets in your trust as a way of collecting on the debt?
A possible remediation that a creditor can use to force a debtor-settlor (or beneficiary) to relent, would be to request a court to issue a Mareva injunction against the assets of the trust. A Mareva injunction is a temporary restraining order, often also referred to as a freeze order.
When issued by the court (in this case), it prevents the settlor, trustee, or beneficiary from manipulating the assets of a trust in any manner, pending the outcome of a case or trial brought against one or all of them by a creditor. However, the Belize Asset Protection Trusts Act clearly prohibits a Belizean court from issuing a Mareva injunction against a Belize trust. From the onset, the asset protection features of the trust already preclude a creditor’s request for the issuance of a Mareva injunction.
This is significant because a creditor can ask a court to issue a Mareva injunction ex parte, that is, without the debtor being aware of the action being taken against him or her. If a Mareva injunction was issued against a trust, a debtor may suddenly find himself or herself without access to the very assets he or she may need to help fend off litigation. No less than the Supreme Court of Belize has confirmed and defined this stance regarding the issuance of a Mareva injunction against any trust that has been settled under Belize jurisdiction.
3. Political and Economic Stability of Belize
Belize has an ideal location. It’s a tropical paradise nestled between lush forest land and the clear blue waters of the Caribbean Sea. It also has a thriving economy fueled by tourism, the exportation of crude oil and other petroleum products, and of course, the significant revenues generated by its offshore trust and asset protection services. Except for its longstanding territorial dispute with neighboring Guatemala (which was settled in 2008), Belize has enjoyed a comparatively stable political climate. The Belize government also shored up its financial and banking statutes and infrastructure in an all-out effort to make the country more attractive not only to foreign investors, but to offshore trust settlors and company founders as well.
A well-settled economic and political environment with protective trust legislation in an idyllic setting that, by almost any standard, is the very definition of a tropical paradise – that is Belize in a (coco) nutshell. Even to the most discerning individual, this small (but mighty) Caribbean country is a powerhouse jurisdiction for the establishment of an asset protection trust.
Setting a Belize Asset Protection Trust is one of the most powerful strategies to shield assets from lawsuits. The well-crafted The Belize Trust Act was drafted to offer settlors of such trust with a legal tool to rival those offered in other jurisdictions. The trust statutes offer strength, robustness and virtual impenetrability. The Belize courts are not legally able to set a trust aside nor invalidate the transfer of assets therein. This is the case even in relation to the dissolution of marriage, forced heirship or in cases of bankruptcy.
The common remedial acts taken by creditors in order to seize assets have been blocked by statute. Courts in Belize are required to deny claims of fraudulent conveyance, requests to freeze trust assets or motions to set aside the trust. The bottom line is that the roads normally utilized to legally force the transfer of assets from person “A” to person “B” have been bombed and bulldozed. Self-righteous foreign attorneys are left powerless to enforce judgments when the assets are housed in the appropriately structured Belize asset protection trust.
The financial fortress provided by the Belize trust legislation grants virtually no creditor access to trust assets. There are no practical options given to creditors that will allow them to take assets out of the trust in order to fulfill a court-ordered debt obligation, in spite of a foreign ruling to the contrary.
Belize Asset Protection Trust Conclusion
As stated, Belize has a stable economy and a relatively well-run government, giving it economic robustness. It has its own banking system, a sound judicial history and is a popular tourist destination. All totaled, these benefits give Belize a leg up on jurisdictions offering similar protective structures. Its beautiful beaches, luxurious hotels and warm waves of the Caribbean Sea offer an attractive place to come and visit the home of your well-secured financial stronghold. To have the optimal protection in a prime location is what the Belize trust is all about. So, if you are looking for a jurisdiction with a powerful financial services industry offering secure a resting place for your hard-earned wealth, you may have found just the place.