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Bahamas Trusts

There are various regulations and legislation in connection with trusts in the Bahamas in order to protect the trusts and assets and ensure that the Bahamas remains a major financial centre. Although there is no need to register or record a trust as under the Trustee Act of 1998 trust deeds are exempt from registration under the provisions of the Registration of Records Act, you can choose to register your trust if you desire which can be useful in certain circumstances like if it holds physical property.

The most popular type of trust by far is the Asset Protection Trust. This is where a settlor transfers assets to the Trust. The Fraudulent Dispositions Act of 1991 has measures to protect these assets. For instance future creditors have absolutely no claim over any assets in a trust, in order for a valid claim the liability must have existed at the date of transfer, so if you were to put your assets into a Bahamas Trust in a point in your life where you are doing well and then business was to take a turn for the worse then your assets would be safely retained for your children or chosen beneficiary. Certainly something which deserves thought considering the recent global climate. Any legitimate claim from creditors must be made within two years of the transfer.

There are also various other types of trusts available such as;
- Charitable Trusts, these are very specific and must fall into one of four categories and have value or importance to the public in order to qualify.
- Authorised Purpose Trusts, this is set up for the achievement for a specific purpose. Although it should be noted that they may not hold land in the Bahamas directly or indirectly

There are various reasons for setting up a trust other than stated above such as;
- Protection of assets. They are safe from future creditors, law suits, bitter spouses, political influences and various other factors.
- More adaptable than wills. Trusts have certain advantages over a common will, for example wills are public whereas trusts are not, also a trust does not die and therefore can continue long after the death of the settlor allowing a lot more flexibility in the distribution of assets.
- Tax reduction. Many trusts come with various tax advantages.
- Death Duties. Trusts do not pay death duties.
- Force heirship. Some countries have various inheritance rules ensuring that close family members benefit from wills. Trusts allow you complete control over where your assets go giving you the choice of who deserves to benefit.

If you would like more information regarding Bahamas Trusts or Trusts in any other jurisdiction please follow the link below or call us on our offices Telephone Number: 44 20 7097 1385

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