Cost to Set Up an Offshore Trust

As with most legal and financial services, there is a range of fees and costs to form an offshore trust. The starting cost of an offshore trust with an experienced attorney is between $15,000 to $25,000. Larger law firms charge more, often $30,000 to $40,000 for an offshore trust plan.

There are also some companies—not law firms—whose primary business is to sell offshore trust packages. We have found their fees to start in the range of $20,000 to $25,000 for an offshore trust.

Legal fees will be higher if your offshore trust agreement includes many provisions customized for your situation. Also, trusts established in specialized jurisdictions such as the EU or the Middle East are more specialized and more expensive.

Offshore trustee companies typically charge a setup fee of around $5,000 and a base annual fee of about $4,000.

If your offshore trust plan includes an offshore LLC, you should expect to pay additional legal fees both in the startup and annually.

Why Offshore Trusts Are More Expensive Than Domestic Irrevocable Trusts

Offshore trusts are much more complex than a typical domestic trust. The added cost is the result of both higher legal fees and fees charged by the offshore trustee. There are significantly fewer attorneys that can assist with offshore trusts than domestic trusts.

Legal Steps To Create an Offshore Trust

The legal steps to create an offshore trust involve two separate tasks.

First, an attorney has to establish you as a client of a foreign trustee. Foreign trustees are selective about individuals they will accept as clients for fear of being associated with disreputable or controversial debtors. Reputable offshore trustees carefully conduct a due diligence investigation of all prospective clients. Your offshore trust attorney will assist you in assembling personal financial information, tax returns, and third-party recommendations for submittal to prospective trustees and their due diligence investigation.

Second, the attorney will draft the trust agreement. Offshore trust agreements have many similarities to a domestic asset protection trust, but there are also important differences. Here are some examples:

1. The trusts are subject to statutes enacted by the foreign country where the trust is settled.
2. Foreign trust agreements, by custom, use unique terminology.
3. There are income tax considerations to consider in drafting a foreign trust agreement.
4. Each offshore trustee company has its own clauses and language that it requires in any trust it manages.
5. Offshore asset protection trust agreements must define who will manage trust assets and by whom.
6. The customized provisions of your trust agreement must be submitted for review and approval by your offshore trustee.

Offshore Trustee Fees

Reputable offshore trust companies charge an initial setup fee to investigate and then take on a new trust client. These companies then charge an annual base fee to serve as trustee.

Both the initial and annual fees are usually around $4,000.

They will charge additional fees at an hourly rate for requested or special services such as the preparation of financial reports at your request, the preparation of tax documents, and their defense of the trust from U.S. creditors.

Conclusion

An offshore trust is a relatively complicated trust structure that requires specialized knowledge and experience. You should expect to pay at least $20,000 to $25,000 to experienced professionals to set up an offshore trust.