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Frequently Asked Questions

1. What is a trust?
2. How does a trust work?
3. Why should I invest in a New Zealand trust?
4. How do I protect my assets?
5. What is the life of the trust?
6. How do I set up a New Zealand offshore trust?
7. How do I name the trust?
8. Who is the settlor?
9. Who are the trustees?
10. Who are the beneficiaries?
11. Is a NZ trust required by law to be registered?
12. How will a NZ offshore trust protect my assets?
13. Where can a New Zealand trust invest?
14. How do I get assets in to the trust?
15. How do I access funds from the trust?
16. How safe is your money offshore?
17. What name goes on the trust bank account?
18. How much does a Designer New Zealand offshore trust cost?
19. How do I get a Designer New Zealand offshore trust?





1. What is a trust?

A trust is a contractual agreement of trust. The settlor places something of value, into the care of the trustees, for the benefit of the beneficiaries. This contractual agreement must be witnessed. If you don't have trust, then you don't have a trust. A trust is a lawful, ethical and effective way to protect your assets.

Ownership of the property held in trust is divided into legal and equitable. The trustee has legal title to property held in trust that the trustee is under contract to safeguard or exploit for the benefit of the beneficiaries. The beneficiaries have the equitable or beneficial ownership of the property.
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2. How does a trust work?

A trust is very powerful and very flexible. It is much like a living will but with the added confidence of knowing that it cannot be taken from you during your lifetime nor, if properly designed, be overturned or held up in probate upon your death. A trust affords the greatest protection when the Settlor, Trustee and Beneficiaries are all separate parties and when the following circumstances are maintained:
  •   No gifting of assets to the trust by the trustees
  •   All transactions are at arms length reflecting commercial reality
  •   The trustees retain total control over the trust assets
  •   The trust does not have a Tax File Number
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3. Why should I invest in a New Zealand trust?

  •   To keep your assets private and confidential
  •   To facilitate wealth accumulation
  •   To protect yourself against lawsuits
  •   To legally minimise taxation
  •   To place a barrier between you and government
  •   To protect assets in the event of a family disruption
  •   To leave an inheritance to your children's children
  •   To create financial freedom
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4. How do I protect my assets?

A well designed trust is an excellent vehicle for holding assets. By holding assets in trust you can often still enjoy the use of trust property but public record of personal ownership is avoided. Assets not held in your name cannot be taken from you. For strong asset protection never retain your assets in your name.

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5) What is the life of the trust?

The life of the trust is normally 80 years, however the trust can be resettled at any time earlier.

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6) How do I set up a New Zealand offshore trust?

Because every situation is unique and everyone has their own particular goals and objectives our experienced advisors look at each client individually. You tell us your circumstances and we will tailor design a structure to best suit your personal needs. We at Designer Asset Management can help with the design and structure of all the necessary functions of the trust.

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7) How do I name the trust?

There are very few restrictions on naming a trust. Many folk like to name a trust after of a body of water, geographical location, animal or plant. Others prefer names that conjure up feelings of emotion, faith or philanthropy. If you are interested in privacy, we suggest that you avoid naming the trust after your family name.

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8) Who is the settlor?

The settlor is fundamentally the one who creates the trust. The trust is created by a settlor that gives a settlement (of inherent value) to trustees to hold in trust for beneficiaries. Once the settlor has assigned the settlement over to the trustees' control, the settlor releases control of those trust assets. The settlor may issue a non-binding Letter of Wishes to the trustees for guidance.

Under New Zealand tax law, the taxation status of a trust is wholly determined by the residence of the Settlor. If the Settlor is a non-resident of New Zealand, then the trust is defined as a foreign or offshore trust for tax purposes. However, any person who subsequently gifts property, or sells property below current market value, or makes a no interest loan to the trust even after the trust has been settled will also be deemed a Settlor under New Zealand tax law.

Designer Asset Management has a very good relationship with a charitable foundation in Panama. The foundation is pleased to provide a settlement for a charitable trust. The Foundation then becomes the non-resident settlor.

Common synonyms for the term settlor are grantor, creator, and trustor.

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9) Who are the trustees?

The trustees control the assets held in trust. There is a requirement to have at least one New Zealand resident trustee to qualify as a New Zealand offshore trust.

The cleanest way to achieve this is to incorporate a special purpose New Zealand company to appoint as trustee. You can suggest name preferences for the New Zealand company to us or we can select a name.

A non-resident of New Zealand can own the shares and be the director of the New Zealand Company thus controlling the company and ultimately the New Zealand Offshore Trust. Where a New Zealand company has non-resident shareholders or directors that company must, in addition to the stated costs, pay for a statutory audited set of documents for submission to the New Zealand Companies Office. If the sole purpose of the company is to act as a trustee then these documents will reflect a nil activity report.

Alternatively, 'effective' control of the company can be secured by purchasing an 'option' to buy the shares of the company where that option contractually limits activities of the company. Together with a limited Power of Attorney to manage certain financial affairs of the trust, including the bank account, on behalf of the company the client ultimately retains 'effective control' of the trust without bringing unwanted attention to themselves.

Using these techniques, clients maintain 'effective control' of assets while avoiding being deemed trustee or having absolute control on paper.

The trustees can be replaced at anytime by resolution.

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10) Who are the beneficiaries?

The beneficiaries are the beneficial owners who do not hold legal title but who will ultimately benefit from the assets held in trust. The beneficiaries will commonly be children, grandchildren or a charitable cause. A charitable cause may include any combination of health, education, advancement of religion or other purposes of benefit to the community.

The main reason people establish trusts is to be in 'control' of assets but not 'own' them. Assets are private and kept safe from various predators. Ownership eventually passes to the beneficiaries on vesting day unless distributed earlier. This leaves beneficiaries with the issues of ownership that those who established the trust were avoiding. For this reason it is worth following the proven techniques of the wealthy who use trusts to transfer the 'control' of assets through generations not the ownership.

Charitable organisations number among the wealthiest organisations on the planet providing strong asset protection for multiple generations. By establishing a private charitable trust your descendents retain the same benefits you maintain by 'controlling' wealth and not 'owning' it.

By avoiding to name specific beneficiaries, the potential temptation of those beneficiaries to sue the trustees for not acting in their best interest is removed. One of the foremost reasons a trust could wind up in a legal dispute is thus circumvented. In addition to strong asset protection, a charitable trust provides an ideal opportunity to be of wonderful benefit to your club, church or community.

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11) Is there a trust register in New Zealand?

There is no registration process for a trust in New Zealand. There is no law in New Zealand that compels a trust to register with any government body of any kind. A New Zealand trust is private.

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12) How will a NZ offshore trust protect my assets?

A trust is an asset protection vehicle of privacy and upheld by the courts based on their strong foundation in common law. Assets held by a trust become trust property; they are no longer your assets. Therefore, although you can still control those assets they cannot be taken from you.

A trust bank account is also property of the Trust. Strict banking privacy laws in some jurisdictions protect banking records against disclosure to either the government or anyone else. Unless there is evidence of criminal activity, it is extremely difficult for any predator to steal money held in a trust account in a foreign country.

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13) Where can a New Zealand trust invest?

A New Zealand offshore trust is an excellent offshore investment vehicle and can invest in the same way that any other International Business Corporation (IBC) can. A New Zealand trust can also purchase property in New Zealand. The costs for a New Zealand offshore trust are normally significantly lower than virtually any other tax haven jurisdiction.

For additional privacy and security we recommend that assets held in an offshore jurisdiction be owned by a separate trust.


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14) How do I get assets in to the trust?

For maximum security the very best way to get assets in to a trust is through an arms length transaction that reflects commercial reality. These transactions are prepared using a sale and purchase agreement and, where necessary, a Deed of Debt. New Zealand residents must sell assets to a New Zealand offshore trust at an appraised fair market value or loan money to the trust at market interest rates to avoid the possibility of being 'deemed' a settlor. This is an excellent practise for anyone wishing to get assets in to a New Zealand trust from any jurisdiction. All transactions of this nature must be recorded in the trust minutes and a caveat placed over titles to property held in trust. Useful contracts along with example minutes are included as part of a trust package.


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15) How do I access funds from the Trust?

For maximum security the very best way to get assets out of a trust is through an arms length transaction that reflects commercial reality. These transactions are prepared using loan or line of credit documentation. If assets were sold into the trust and the trust has not paid for those assets or if money was loaned to the trust initially, then those funds can be returned simply as a legitimate repayment of a loan.

Alternatively, if the trust is designed appropriately, the trust can make an endowment to a second trust. A second trust can then, if the trustees agree, purchase any other wanted assets.

All transactions of this nature must be recorded in the trust minutes. Useful contracts along with example minutes are included as part of a trust package.

A private offshore account with debit card is a prudent solution for international transactions. For ultimate privacy and security a trust as well as trustees can obtain a free online account at www.pecunix.com.


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16) How safe is your money offshore?

Despite local media reports your money is generally safer held in an offshore bank account. Most people the world over keep money in a local bank because they perceive it to be safer. Local banks are generally more unsafe because they fall easy prey to cash strapped local authorities and collection agencies. It makes little sense to hold significant sums of money in local bank accounts that get continually raided by local authorities. The Internet has made international banking a viable and convenient alternative. Our experience is that you can achieve greater safety, stricter privacy, lower fees and no tax reporting requirements when banking offshore


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17) What name goes on the trust bank account?

Generally the bank account will be given either the name of the trust e.g. "XYZ Trust" or include both the name of trustee as well as the trust's name e.g. "ABC Limited as trustee for XYZ Trust". The second option provides greater flexibility allowing deposits to be received in either the name of the trust or the trustee. It is also possible to open an account for the trust in the name of the trustee (or trustees) providing that this is properly documented in the trust minutes.

If a company is the trustee, a representative having the appropriate authority of the company can sign on the trust's account. The representative can be either a company director or one with Power of Attorney. One signatory will suffice although two or three signatories are recommended.


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18) How much does a Designer New Zealand offshore trust cost?

Our prices are displayed on this Price Guide.

Please send Pecunix payments to: payments@designertrust.com
Otherwise Contact the Payments team for alternative payment instructions.


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19) How do I get a Designer New Zealand offshore trust?

Please Contact Us with the details about your particular situation and tell us where you live and what you are hoping to achieve. We will facilitate the rest. Our policy is to respond the same day during week days.

To communicate with us securely please use this PGP key. To send mail privately using PGP you will need to download a free version of PGP at the PGP website. Learn how to use PGP by viewing a free PGP tutorial on the Pecunix website.

Alternatively you can send us a secure message by opening a free ziplip e-mail address and sending us an e-mail to DesignerTrust@ziplip.com.

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"A good man leaves an inheritance to his children's children"
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