The Passport Trust is an asset protection vehicle that combines the flexibility and simplicity of a domestic asset protection trust (“DAPT”, also known as a Nevada On Shore Trust or “NOST”) with the advantages of an offshore jurisdiction’s additional protections against creditors, if the need arises.
Passport Trusts include “passport” provisions in the trust agreement that enable a NOST to be redomiciled in a foreign non-US jurisdiction such as Nevis or the Cook Islands if there is ever a distress event. Typically there will be no new waiting period for creditor claims in the new jurisdiction – the original transfer date of assets into the NOST will be used as the transfer date for purposes of the foreign jurisdiction’s rules regarding creditor claims.
Passport Trusts lower the entry cost to obtain the additional protection an offshore jurisdiction can provide by allowing you to begin with a NOST and ‘start the clock’ on the waiting period for protection from creditor claims and later convert to an offshore trust, if necessary, for the best of both worlds.
Again, the Passport Trust begins as a NOST with all the protections that Nevada’s self-settled spendthrift law provides, but includes a special passport provision that enables the Trustee to move the trust’s domicile to a foreign jurisdiction. In conjunction with adding this provision to your NOST, application will be made to a foreign trust company upon the creation of the NOST to pre-approve the NOST for re-domiciliation. The foreign trust company shares in the initial due diligence regarding the creation of the trust. As a result of their early involvement, the foreign trust company agrees to serve as a special trustee, dormant and waiting with ‘open arms’ to receive the trust assets if a distress event occurs.
To find out more about Passport Trusts and how it could help protect your family’s legacy, schedule a complimentary consultation with one of the knowledgeable attorneys at JEFFREY BURR, LTD. today.
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