| Case Study of The Private Trust: | | | | for US citizens. This may be true for the citizens of |
| Private Trust Services claim they can set up a very | | | | other countries also. They claim that their private |
| inexpensive, legally sound, and very specially designed | | | | trust is not like this at all and you should steer clear |
| tax-free private trust for their clients. However, the | | | | of the hucksters who promote the other kind of |
| strategy of a superior solution is talked about in the | | | | defective structures. |
| last six paragraphs below. If you do not have time to | | | | Case Study Reveals Grave Weakness in the Private |
| read the whole article then go there now. But lets | | | | Trust: |
| first define what a P.T. (private trust) is before we | | | | So, is their private trust legal? The one Achilles heel in |
| look at their trust in detail and before we decide on | | | | this whole thing is that each and every trust that is |
| its legality for tax free investing and compare it with | | | | ordered is set up for each and every client that |
| the charitable foundation strategy at the end of the | | | | orders one. So, the trust is actually an alter ego of |
| article. | | | | the client and the set up is tailor made so the client |
| Before going any further we need to make the | | | | can avoid paying taxes. This is how most tax |
| definition of a private trust clear: People who are | | | | authorities would view the establishment of this kind |
| looking for this kind of structure are looking for a | | | | of trust. It would be labeled a sham for attempted |
| legal way to keep their onshore or offshore assets | | | | tax free investing and the person could get big fines |
| private and hidden from those who would like to | | | | or even jail time. |
| take them in some way. They are also looking for a | | | | Charitable Foundation Strategy: Why it is legal and |
| legal way to gain tax free investing until something is | | | | Superior |
| paid out to them. Some would disagree with this | | | | In our opinion, a bullet proof tax freedom strategy |
| complete definition, but if you get into the minds of | | | | would involve ONE charitable foundation that has |
| most people who are looking, you would agree it is | | | | been set up several years or more prior to a |
| sound. | | | | charitable donor approaching it. This ONE charitable |
| But we found that most trust services cater to the | | | | foundation is involved with contributing to worthy |
| wealthy and so we looked high and low for an | | | | programs that the donor can truly see value in. |
| offshore services provider that would help anyone no | | | | Therefore, the donor gives a substantial amount of |
| matter how much money they have. If you are | | | | money to the foundation and then afterward is |
| familiar with other private financial services you know | | | | asked by the foundation council if they would like to |
| that they charge very very high fees to set up legal | | | | manage the amount they contributed minus a fee for |
| structures for their clients. But this service provider | | | | processing their contribution. The donor would then |
| charges low fees to make a private trust available to | | | | become a contractual employee. |
| anyone for tax free investing. We decided to do our | | | | They as a contractual employee would agree to set |
| case study using P.T. Services to do a critique of the | | | | up a very private foreign llc (foreign limited liability |
| soundness of the private trust concept since | | | | company) or an ibc (international business company) |
| everything about them is very good. | | | | in a private jurisdiction for the owner, manager, and |
| Private Trust Services - their strategies critiqued | | | | member which is the charitable foundation. A bank |
| Private Trust Services offer a FREE and unique | | | | account will be opened and the money is then |
| banking and investment system for tax-free | | | | transferred from the charitable foundation to the |
| investing and compounding. | | | | bank account of the offshore LLC or IBC. From that |
| You may be thinking to yourself: "Well, my country | | | | bank account money is sent to various investment |
| has made tax-free investing via private trusts | | | | accounts for tax free investing or wherever the |
| virtually impossible with all of their rules and | | | | donor employee directs it to go. If the contractual |
| regulations. It is impossible to have one of these | | | | employee is a good manager then the onshore or |
| since the tax authorities rule they are a sham." | | | | offshore assets will grow in value. The investment |
| And these days for most trusts this is true! However | | | | accounts do not need to be offshore. They can be |
| with their special structure, you are neither the | | | | onshore also. |
| trustee, settlor, creator, protector, or beneficiary of | | | | The contractual employee of the foreign llc or ibc |
| the tax-free private trust. All you have is a | | | | which is owned by the charitable foundation has a |
| contractual consulting agreement with the trustee. | | | | contractual consulting agreement with the charitable |
| But when you are paid for your consulting or | | | | foundation and with the foreign llc or ibc he or she is |
| research services then you may have taxes to pay | | | | an employee of. The employee may be granted tax |
| depending on your residency and citizenship. It is | | | | free loans from the foundation council. Or, the |
| ultimately up to you. | | | | foundation council can pay the donor employee a |
| Through the contractual consulting agreement you | | | | salary for the work as investment adviser of the |
| can make tax free investment and other | | | | assets they contributed to the foundation. |
| recommendations. Furthermore, this tax-free private | | | | Through the contractual consulting agreement the |
| trust can reimburse you for the expenses generated | | | | foreign llc or ibc employee can make tax free |
| by looking after its affairs, including lodging, food, | | | | investment choices and make other |
| travel, and transportation etc. | | | | recommendations to the council for the benefit of |
| The private trust is domiciled in a bullet-proof | | | | both the foundation and the llc or ibc he or she is |
| jurisdiction, and thus enjoys the anonymity and other | | | | working for. Furthermore, this charitable foundation |
| protections this jurisdiction guarantees. Your name will | | | | can reimburse this donor employee for the expenses |
| not show up on any public record, and the trust | | | | generated by looking after the affairs of the |
| enjoys the protection of the strong courts AND the | | | | offshore llc or ibc, including lodging, food, travel, and |
| best trust laws in the world for asset protection and | | | | transportation etc. and this could be done through |
| privacy. If this jurisdiction ever capitulates to freedom | | | | loans or a salary. |
| robbing global powers, then the trustees can move | | | | Critique of the Private Trust Versus the Charitable |
| the trust to another jurisdiction that is bullet-proof. | | | | Foundation |
| AGAIN, these private trusts are not recorded at all, | | | | How is this charitable foundation and foreign LLC or |
| and are totally private which helps insure that your | | | | IBC arrangement better than the strategies of |
| desired goals are accomplished. Again, I am just | | | | Private Trust Services? Well, one big reason it is |
| reporting the claims of those who set up these | | | | better is that the charitable foundation was not set |
| trusts. | | | | up for the donor, but has been established years |
| The private trust is started with property of nominal | | | | prior to the llc or ibc that is set up for the |
| value, in accordance with the trust instrument. | | | | management of the money that the donor |
| Subsequent funding with trustee approval can be | | | | contributed to the charitable foundation. Other |
| done by anyone via gifts, loans, or other | | | | providers will set up a trust or a foundation "for you" |
| arrangements. It is NOT required that transfers of | | | | and you are supposed to hide the fact that you had |
| cash or other assets (at fair or less than fair market | | | | anything to do with the foundation or the trust. But |
| value) to these structures be reported. This feature | | | | after this defective structure has been set up, if |
| assures your privacy and asset protection also. | | | | your taxing authority probes deep enough, they may |
| The assets of a private trust can be invested in total | | | | label what you did as a sham for tax evasion and rule |
| privacy into the numerous investment opportunities | | | | against you with fines and possibly jail time. |
| available to companies and individuals. Any investment | | | | But if you contribute as a donor to a charitable |
| returns can compound completely tax-free, allowing a | | | | foundation that has been set up years previously, |
| significantly greater rate of growth than if the | | | | then the record is there right on the internet and in |
| returns were taxed. The time-frame in which sizable | | | | legal paperwork, and you have something in your |
| sums are able to be generated is thus significantly | | | | defense should the issue ever be raised. So you can |
| compressed. | | | | see why this arrangement is better than a private |
| They claim the legal foundations of their services are | | | | trust and provides bullet proof asset protection, tax |
| exceptionally sound, but their effectiveness in | | | | free investing, compounding and income for the |
| providing tax freedom, asset protection and other | | | | charitable foundation and also employee benefits for |
| benefits depends critically on the conduct of all | | | | the lucky donor who made a contribution to the |
| parties involved with this private trust. They claim it is | | | | charitable foundation and afterward discovered this |
| the way they appoint the special beneficiary that | | | | little known tool and one of the only legal loopholes |
| allows for the tax free investment compounding and | | | | available for tax freedom. |
| legal non-reporting of asset transfers that | | | | Our case study of Private Trust Services revealed |
| distinguishes their trusts. | | | | them to have a very good product in all ways but |
| They also steer clear of the so called "foreign grantor | | | | one: It has grave legal holes in the area of tax free |
| trust" option, which allows a foreign attorney to act | | | | investing which they claim a client can have with their |
| as a grantor on behalf of the client. This is an | | | | service in setting up a trust for the client. This is to |
| erroneous definition of the term foreign grantor trust | | | | be compared to the suggested strategy as given |
| and also a sham by the very definitions given in the | | | | directly above which proceeds from our expertise in |
| US tax code and would be ignored by the IRS for | | | | knowing that a charitable foundation structure, which |
| U.S. clients -- an attorney acting on your behalf is the | | | | was established years previously and which a donor |
| same as you taking an action yourself. Such does not | | | | gives to, can be financially beneficial for the donor as |
| remove the reporting requirements of the structure | | | | described above. |