There was considerable news coverage recently of those named in the “Pandora Papers” such as former or current heads of state, celebrities, super-rich oligarchs, and others seeking to protect their assets and shield income from being taxed. But here is the question … why should the fabulously wealthy be the only ones able to protect their assets and shield income? Answer? They’re not! Read on for information on how you too can take advantage of tools like a trust.
I pulled some highlights, particularly about selecting a trust company, from this article by Robert Powell, MarketWatch, 11/6/21 I thought were helpful. So, if you’re interested in protecting your assets, as he says “You just need what the rich have: Access to a professional who knows what type of trust to establish, where to set it up, and what trust company to use. And it wouldn’t hurt to have enough money to make it worth your while, perhaps a business that you’re about to sell, for instance.”
His article went on … “Steve Oshins, an attorney with Oshins & Associates, is among those professionals. For many years he’s been monitoring the best states in which to establish various types of trusts: domestic asset protection trusts, dynasty trusts, non-grantor trusts, and the like. And, according to Oshins, South Dakota, Nevada, Delaware, and Alaska are the top four states in which to create a trust. But there are other states as well, including Tennessee and Ohio.”
Choose the right trust company
But, said Oshins, it matters less which of the top states you use to establish a trust and more your choice of a trust company. “I always tell people that you don’t have to go to the number one state,” he said. “You can go to the number one, two, three, or four state. The most important thing is generally the choice of a trust company that you use to get your jurisdiction. I’d rather go to the number three or four state with a cooperative, reasonably priced trust company than the number one state with (a trust company) that’s overcharging me because I’m wealthy, and not cooperative and slow.”
So, how might you go about picking a good trust company? The key is working with a professional who can vet the best one for your needs, Oshins said. And the best ones will one, charge you a flat fee and not a percentage of the assets unless they are managing the assets. “The cooperative ones are charging a reasonable, but low flat fee,” said Oshins. “And it should be a flat fee whether there’s $1 trillion or a $100,000 in the trust. If they’re doing basically the same work, it’s the same fee.”
The best trust companies are also fast “in accepting the trusts,” said Oshins. You don’t want to use a trust company where its legal department sends back 20 pages of changes to your trust document, and then it takes a month of back and forth accepting the trust documents. “That’s uncooperative,” said Oshins. You also don’t want to work with a trust company that takes a long time to approve distributions from the trust.
“We want someone who’s fast, reliable, accurate, and reasonably priced,” he said. “And then I don’t care if you go to the number four state or the number one state. You did well if you picked the right trust company.”
As for the Pandora and Panama Papers, Oshins said it’s much ado about a few bad actors. Most of the people establishing trusts are merely doing what’s legal. “Nobody ever writes a story that has a headline: (Attorney) successfully sets up a trust for a client,” said Oshins. “There’s nothing interesting there. Right?”
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate, or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate, or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526). David H. Lefton is an Estate Planning and Probate Attorney. He is a partner in the law firm of Barron, Peck, Bennie & Schlemmer.
MarketWatch
Last Updated: Nov. 6, 2021, at 12:25 p.m. ET