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The Island of Nevis is part of the nation officially known as the Federation of Saint Christopher and Nevis or St. Kitts and Nevis for short, located in the Caribbean about 1,300 miles southeast of Miami, Florida. Nevis is the smaller island in the federation, with a population of about 12,000. St. Kitts and Nevis is a sovereign nation and member of the British Commonwealth. The legal system is based on English common law. The tax environment is very friendly: there is no income tax, estate or inheritance tax, or gift tax. While it has an excellent reputation with tourists, much of the local economy is driven by its status as a secure offshore hub for company formations and bank accounts. The country is firmly committed to secrecy. Nevis is also known in the United States for being the birthplace of Alexander Hamilton.
WHAT IS ASSET PROTECTION?
Asset protection refers to any legal arrangement or method used to protect your assets from lawsuits, creditors, and other legal threats against you. If a judgment is issued against you, creditors could have the right to seize assets owned by you.
By forming limited liability companies, trusts, and other legal entities, you can separate yourself from the assets you own. Some forms of asset protection can also be used for estate planning purposes. For example, forming trusts can help streamline the succession process and protect the assets received by the individuals that inherit your estate. If protecting your assets is your priority, it’s important to form a comprehensive strategy that takes into consideration your particular situation, goals, and needs. A Nevis Trust may be one component of a much broader effort to shield your assets from creditors and potential legal complaints.
WHAT IS A NEVIS ASSET PROTECTION TRUST?
Generally speaking, an asset protection trust is an estate planning trust that can hold an individual’s (known as the Grantor) assets in order to shield these assets from potential future creditors. Asset protection trusts are commonly regarded as the legal vehicles able to provide the strongest protection against creditors, judgments, and lawsuits. Ideally, an asset protection trust would help prevent litigation before it begins, by letting the plaintiff know that litigation will be costlier and much more difficult than they originally believed.
While U.S. based clients might opt for an asset protection trust based out of one of the sixteen U.S. states that allow for domestic asset protection trusts, these simply do not offer the same level of protection if the trust is ever threatened in a U.S. court. Only offshore trusts can guarantee that the assets can remain out of reach from a judgment issued by a U.S. court. A Nevis Asset Protection Trust is simply an asset protection trust established under the laws of St. Kitts and Nevis and administered from the Island of Nevis itself. But since asset protection trusts can be established under a variety of jurisdictions, why choose Nevis?
Over the course of decades, the island of Nevis has gained a reputation for being one of the most favorable jurisdictions in the world for asset protection and privacy. Offshore trusts in Nevis are regulated by the Nevis International Exempt Trust Ordinance. These Nevisian laws vigorously protect the local finance industry and its offshore clients. Nevis Trust Legislation allows the grantor and beneficiaries protection from claims by imposing substantial barriers to plaintiffs. Even the most determined of creditors would be smart to consider a settlement rather than attempt to break into a Nevis trust. To date one is hard-pressed to find a successful case of a private creditor penetrating a Nevis trust.
THE MAIN BENEFITS OF A NEVIS TRUST
To commence legal proceedings on Nevis, a plaintiff has to file a bond of $100,000 with the Nevis Ministry of Finance before bringing legal action against an international trust. A 2018 amendment to the laws changed the LLC requirement to an amount established by the Nevis High Court, but the bond to litigate a Nevis trust remains at $100,000 U.S. dollars.
Contingency attorney fees are prohibited in Nevis. A creditor will have to pay out of pocket for the court bond and any legal fees incurred. Additionally, in order to bring a case in Nevis, a locally licensed attorney needs to be hired, not a U.S.-barred lawyer. Many of the attorneys licensed in Nevis will be unable to bring a case against local banks and trust companies due to conflict of interest rules.
Nevis offshore trusts are tax-exempt under Nevis tax laws and can be settled by essentially any non-resident. Under the laws of Nevis, self-settled trusts can protect assets: the settlor can also be a beneficiary of the trust and maintain asset protection regardless.
Nevis does not recognize foreign judgments. A court order from the United States, or any other country for that matter, will not have an effect on the island of Nevis. A plaintiff needs to litigate the case in a local court in order to obtain an effective judgment against a Nevis trustee.
The Nevis trust statute of limitations on fraudulent conveyance is two years from the cause of action. That means a Court in Nevis will simply not accept a case claiming fraudulent conveyance and challenging the transfer of assets into the trust once this time period has elapsed.
Nevis does not allow asset freezing orders. Many common law jurisdictions recognize injunctions that can freeze trust assets and prevent the beneficiaries from receiving or moving trust funds. The laws of St. Christopher and Nevis specifically disallow the use of any orders that would interfere with trust property.
Nevis has a much higher standard of proof for civil cases. In order to win a civil case in the United States, the plaintiff needs only to prove his case by a “preponderance of the evidence.” In Nevis, the standard of proof for civil cases is “beyond a reasonable doubt.” This is the highest standard in the common-law system and is the standard for U.S. criminal law.
ESTABLISHING A NEVIS TRUST
Wondering how you set up a foreign trust in Nevis? While setting up an offshore trust may sound like a complicated and outlandish process, in reality, it is not much different from establishing a trust under the laws of your state of residence. You don’t need to visit Nevis to form a Trust on the island. Instead, you can use a U.S. based attorney to help form the trust using a Nevis-based representative. This means the formation process can be streamlined and prompt.
Under the Nevis International Trust Ordinance, a trust will require the following:
- Local Trustee: This is the person or organization within the island of Nevis that will have the authority to manage and control any trust property. At Blake Harris Law, we can introduce you to licensed, professional trustees in Nevis that have a stellar reputation in the offshore services industry.
- Grantor / Settlor: This is the person or persons who set up the trust and intend to transfer property into it. The Grantor / Settlor does not need to be a Nevis resident.
- Beneficiaries: These are the people who stand to receive the property transferred into the trust. The beneficiaries can also be Nevis nonresidents.
- Due Diligence Process: International regulations require a certain amount of background information regarding the Grantor / Settlor of an offshore trust. The Nevis trustee will require documents such as a copy of a passport, proof of residence, and bank statements.
- Funding the Trust: Once the trust is signed and established, it is important to transfer assets into the trust. A Nevis trust can be used to hold LLCs, bank accounts, or investment accounts.
WHAT CAN A NEVIS TRUST PROTECT?
A trust registered in Nevis can hold a wide variety of investments and assets. Offshore bank accounts and LLCs can be opened under the name of the Trust. Offshore bank accounts, stock market investments, real estate, and other assets can be held inside a Nevis trust. Importantly, while bank accounts can be opened with local banks in Nevis, a Nevis trust can just as easily hold accounts from other offshore banking centers such as the British Cayman Islands, Luxembourg, or Switzerland.
NEVIS LLC VS. TRUST
An LLC forms a company, but a trust is a legal arrangement that designates assets for beneficiaries. While there are clear differences between these two legal formations, they can both serve as asset protection vehicles for U.S. residents. Both LLCs and trusts provide a degree of separation between yourself and your designated assets. At Blake Harris Law we are proud to offer both Nevis-based trusts and limited liability companies as part of our suite of asset protection solutions. If you would like more information about Nevis LLCs please also visit our article on Nevis LLCs.
ARE NEVIS TRUSTS LEGAL FOR U.S. CITIZENS?
Yes. Nevis Trusts are entirely legal for U.S. citizens, U.S. residents, and others – you are simply forming an overseas entity that must conform to local laws and regulations. If you are searching for a legal offshore asset protection method, Nevis Trusts are an excellent option.
CONTACT BLAKE HARRIS LAW TODAY TO CREATE YOUR NEVIS TRUST
If you believe that a Nevis Trust is a suitable option for your financial interests, it’s critical to begin the process of forming the trust sooner rather than later. The longer you wait, the more exposure you have to negative credit events. If you are ready to secure your financial future, it’s time to contact our asset protection attorneys at Blake Harris Law. Our comprehensive approach to asset protection ensures we cover all the bases – this is critical if you want your assets to remain as secure as possible. We start by providing a free consultation that outlines your financial goals. As we have considerable experience in the world of asset protection, we can form a bespoke plan to protect your interests. Don’t hesitate to contact us today if you’re ready to take advantage of Nevis Trusts or other asset protection arrangements.