Nevis Asset Protection Trust

The Nevis Asset Protection Trust is a trust created in accordance with the Nevis International Exempt Trust Ordinance in the Caribbean island of Nevis (NIETO). NIETO was first founded in 1994. In2015, amendments strengthened and improved the asset protection aspects of numerous legal instruments, including a Nevis trust. Examining a comparison chart reveals that Nevis's trust law is superior than that of other jurisdictions. Current Nevis trust law is one of a settlor's most steadfast partners in guaranteeing the security of assets. In a Nevis trust, legal safeguards help to ensure that assets stay hidden, secret, and essentially unreachable by unscrupulous creditors.

Nevis Asset Defense Trust

Nevis Trust Benefits

Here is a summary and list of Nevis trust benefits. The trust is discussed in greater depth below. The Nevis International Exempt Trust Ordinance of 1994 and its revisions are cited.

Bond of $100,000 USD–In2015, a change to the law stipulated that a creditor must post a $100,000 USD ($270,000 Eastern Caribbean Dollar) bond with the Nevis Ministry of Finance before initiating legal action against an overseas trust. While a 2018 revision modified the bond requirement for Nevis LLCs to any sum set by the Nevis High Court, the bond requirement for Nevis trusts remains at $100,000 US.

Self-settled trusts protect assets – Unlike the majority of jurisdictions, the settlor (the person who establishes and funds the trust) can also be a beneficiary and enjoy asset protection. Section 32 states, "A settlor or trustee of a trust may also be a beneficiary of the trust" (4). In most jurisdictions, the asset protection is nullified if the settlor is also the beneficiary. On Nevis, you can even establish a trust in which you, as the settlor, are the sole beneficiary. Alternately, you and your spouse (or others) can share the trust's beneficial interest. You can designate heirs, such as your children, as beneficiaries upon your death.

The Nevis trust statute of limitations on fraudulent conveyance is as short as one year, or two years from the cause of action (such as a car wreck). In summary, fraudulent conveyance is often a legal matter (not a criminal one) in which assets are transferred beyond the reach of creditors. Keep in mind that this does not imply that the assets must remain in the trust for this length of time before they are protected by the trust. After this period, the courts will not hear a case contesting the transfer of assets into the trust. See the distinction? It simply means that a fraudulent conveyance challenge will fall on deaf ears with the Nevis High Court when the minimum time has passed. In contrast, a Cayman Islands trust does not protect trust assets until six years have passed.

A trust created or constituted and a transfer to such a trust are not fraudulent with respect to a creditor of a settlor if:

(a) if resolved, established, or the disposition occurs more than two years after the date such creditors' cause of action accrued; or

(b) when the debt is settled, established, or disposed of before the expiration of two years from the day that the creditor's cause of action accrued, the creditor fails to file suit within one year of the date of settlement, establishment, or disposition.

Nevis does not recognize international judgments; therefore, your adversary must begin a new trial from scratch. Article 28.

Trust can endure forever; the rule against perpetuities is not applicable. Most nations restrict the length of time a trust can stay operating. Nevis permits trusts with an infinite duration.

Nevis does not recognize international court decisions. (It is one of the few nations to give this advantage.)

Can combine or divide trusts - The Ordinance permits the trustee to combine two trusts into one or to divide one trust into two. The trustee may take this action (often at the request of a settlor or beneficiary) so long as it does not interfere with a beneficiary's rights or undermine the trust's objective.

Freezing order prohibited–In the majority of British legal jurisdictions, a temporary restraining order (TRO) is known as a Mareva Injunction or Freezing Order. In other countries, such as the Cook Islands, your adversary may seek a Mareva Injunction to freeze trust assets. This might make it extremely challenging to pay legal fees if your assets are encumbered by a trust. Nevis has prohibited creditors from using the Mareva Injunction against Nevis trusts.

Article 22 (as amended)

"(4) No action or proceeding (whether substantive or interlocutory in nature) shall be heard, and no injunction, order of any kind, or any other relief or remedy, whether legal or equitable, shall be made, issued, granted, or ordered, by the Court with respect to an international trust, if the purpose of such action or proceeding would be to detain, inspect, garnish, attach, or otherwise interfere in any way with:

(a) any trust property, regardless of its location, in St. Christopher and Nevis or elsewhere; or

(b) any right, duty, discretion, obligation, or power a trustee may have about any trust property."

Tenancy by the entireties is recognized - If a married couple holds property as tenants by the entireties (TBE), the trust continues to recognize the property as TBE property. In some areas, TBE ownership prevents a creditor of one spouse from seizing marital assets owned in this manner.

Options for investments - The trust may hold a vast array of investments and other assets. This can include bank accounts, investments in the stock market, the majority of real estate, and more. A trust cannot own land on Saint Kitts and Nevis.

Strong burden of proof - The burden of proof lies with the creditor. Consult Section 24. (1). In addition, a creditor's only recourse is to file a fraudulent transfer case. Creditor actions in Nevis must be filed within one year of the trust's establishment and funding. In addition, the creditor must demonstrate beyond a reasonable doubt and with clear and persuasive evidence that the Settlor created the trust in order to conceal assets from the creditor in question. Therefore, your creditor loses if it establishes its case with 51%/49% "preponderance of the evidence." Instead, your creditor must prove its case to the court on a 97%-3% basis, to use an example. This is a considerably taller wall for your opponent to climb. If the Settlor established the trust for any other reason, such as foreign diversification, estate planning, etc., it would be extremely difficult for a creditor to succeed. In addition, the creditor runs the risk of losing the $100,000 USD bond. Additionally, the creditor must pay for your legal fees.

Strong asset protection-A creditor cannot compel a trustee to distribute trust assets. In addition, if the trust has a protector, a creditor cannot compel the protector to act contrary to the Settlor's wishes as described in the trust. Most crucially, the trustee is exempt from creditor obligation when making payments to or for the beneficiary.

No contingent fee attorneys are permitted; therefore, the creditor must pay out of pocket prior to litigation.

Only local counsel - Your creditor must retain a Nevis attorney. This is a difficulty for your opponent because, in our experience, the vast majority of Nevis attorneys represent trust firms and financial organizations.

You choose your heirs; the trust disregards the forced heirship rules of the Settler's place of origin. Thus, the Settlor, not the government, determines who inherits his or her trust estate.

Since 1984, trustees on Nevis have provided offshore privacy and protection options. The trustees and registered agents are among the most seasoned professionals in the offshore financial services sector. Remember that trust case law typically applies the "walk into the shoes of the debtor" principle. Whatever the debtor could do personally, the creditor is able to do in his or her place. For this reason, you require an impartial third-party trustee, such as our Nevis law firm. This means that a Nevis trustee is not susceptible to foreign court orders. Only if the Settlor has direct access to the trust assets does the creditor have rights to them. Similarly, the creditor has access to the Beneficiary's interest only if the Beneficiary can revoke the trust and assign trust property to the Settlor (or his estate, or creditors). Therefore, it is essential that a seasoned expert design the Nevis trust. That is another reason why a competent trustee is vital. Since1994, our business has been forming companies in Nevis.

This is an essential observation for those who examine the Nevis International Trust Ordinance of 1994 in further detail. Be sure to also review the ordinance's amendments. There have been major alterations over time that were not there in the 1994 original.

Nevis Trust and Company

How a Nevis Trust and Nevis LLC can shield your assets from legal action.

What You Require

Now, let's discuss what the Nevis International Trust Ordinance requires:

The trust must have at least one trustee. We supply licensed, bonded trustees in Nevis. Under the Nevis Business Ordinance, the trustee may be an individual or a corporation.

Settlor & Beneficiaries — Both the Settlor and the Beneficiaries are non-Nevis inhabitants at all times.

Due Diligence— Know-your-client (KYC) documentation must be maintained by the trustee in accordance with international requirements. This comprises a notarized color photocopy of your passport, an actual utility bill displaying your residential address, and a letter of bank reference.

Funding - The trust will be funded using assets. The majority of Nevis trusts own one or more Nevis limited liability companies that maintain bank/investment accounts. Thus, you can serve as the LLC's manager and signatory. You continue in this position until our trustee/law firm is required to safeguard you as the manager of the LLC.

Additionally, there is a very affordable annual renewal cost to maintain the trust. This applies to the trustee. In the end, none of us would work for free for the remainder of our lives. In addition, it includes the annual government fee.

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Nevis Trust Provision Against Injunctions

Once a Nevis offshore asset protection trust is legally established, a trustee is chosen to run the trust in accordance with the trust deed and the settlor's optional Letter of Wishes. The laws of Nevis provide the addition of a protector, albeit this provision is rarely exercised. The protector of the trust can oversee the trustee's actions and choices. They can assist the trustee in carrying out the settlor's wishes. However, a protector is not required for the establishment of a trust in Nevis. The guardian can direct the trustee to take a certain action (such as to distribute an interest or not). Under certain instances, they can even relieve a trustee of his or her trust management responsibilities.

Suppose, for example, that a court outside of Nevis orders an injunction against a trustee or protector. The court order compels them to operate in a manner that would compromise the trust's integrity. This clause can remove them instantly and automatically from their positions as trusteeand/or protector of the Nevis trust. No additional action is required from the trustee, protector, or grantor. Even Nevis courts are not required to take any action for this "dismissal" to take effect. In accordance with the conditions of the trust, a successor trustee or protector will assume the position. If there is no such provision in the trust, the Nevis High Court can choose a successor. The successor must strictly conform to the conditions and purpose of the trust, as well as Nevis law.

Anti-Injunction Clause Implies Three Factors:

1. A trust cannot exist if there is no trustee (or protector, if provisions for one were included in the terms of the trust).

2. Even if a foreign court orders the trustee or protector to accept a verdict, the trust will remain secure. This is because, by virtue of the judgment against them, they immediately lose all relationship to the trust, let alone control over it.

3. Most crucially, within the correct framework for asset protection, you can choose a different trustee. Even better, you can choose to have your trust governed by an entirely different asset protection jurisdiction. A Nevis trust can become, for example, a Cook Islands trust, Belize trust, or Isle of Man trust.

Visit the link provided for additional information on how an offshore asset protection trust operates. It addresses the mechanics and implementation of the most powerful international protective instrument.

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No Discretionary Interest Claim

What is a trust's discretionary interest? A beneficiary's interest in a trust that is subject to the trustee's discretion is known as a discretionary interest. A discretionary interest in a trust is distinct from a property interest, such as boat or building ownership. Neither is it a right that can be enforced, such as a pay or income. Thus, depending on the provisions of the trust, the trustee may or may not grant it to the beneficiary. This is what gives protection for the assets. If a beneficiary could bring such an action directly, a judge may order the settlor to remove monies from the trust and distribute them to his judgment creditor. Providing this authority to a third party can prevent a judge from compelling a beneficiary to pay money.

Example

Assume, for instance, that a creditor obtains a judgment against a beneficiary with a discretionary interest in a Nevis trust. The creditor cannot compel the trustee to distribute the discretionary interest of the beneficiary to the creditor rather than the beneficiary. Nonetheless, Nevis law permits the trustee to continue making payments to third parties on behalf of the beneficiary. Examples include college tuition and health insurance costs. As long as the distributions are in conformity with the rules of the trust, these payments can continue.

Creditors cannot prevent such distributions to third parties or compel the trustee to allocate them to them instead. In truth, a trustee may use up the principal and interest of a trust for the advantage of the beneficiary. Even with a charging order in hand, a creditor will be unable to take action. Is the creator of the trust also a beneficiary? If so, everything stated in this section regarding the beneficiary also applies to the grantor.

Evidently, Nevis trust law strongly restricts a creditor's access to a beneficiary's discretionary interest.

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The Nevis Trust Anti-Coercion Clause

The modifications to the Nevis trust statutes permit a trustee to disregard the instructions of a settlor who is operating under duress. In this situation, duress typically indicates that the settlor is complying with a court ruling from a non-Nevis court about the distribution of his assets or interest in a trust. Regarding trust administration, this has been the custom on the island for decades. Adding an explicit provision to the statute, however, affords grantors an additional degree of legal protection. In addition, the law of Nevis protects a trustee operating in this role from any legal retaliation resulting from a creditor's future action. In the extremely improbable event that a creditor is able to successfully pursue a charge against a trustee, the anti-injunction rule comes in. Once again, a Nevis trust will prevent a creditor from seizing its interestsand/or assets.

Certain Powers Remain with Settlors

A settlor of a trust is permitted to retain some powers over the trust in Nevis. Additionally, they can obtain specific benefits from it. In other words, one can be both a settlor and a beneficiary of a trust, subject to certain restrictions. According to Nevis Trust law, this does not invalidate a trust. Why is this essential? Certainty of Intention is one of the necessary requirements for the validity of a trust. This means that it must be evident that the settlor is relinquishing control of the trust's assets. Therefore, the services of a trustee are required. It is because the trustee holds the assets (under the conditions of the trust) (but does not derive any benefit from them).

This is crucial. If the grantor/beneficiary retains too much influence over the trust, the asset protection provisions of the trust may be compromised. In most jurisdictions, a shrewd creditor can argue that the trust does not meet the Certainty of Intention requirements. This could invalidate the trust. And without the protection of the trust, the settlor's assets are vulnerable. Under present Nevis trust legislation, however, the settlor's retaining of some powers and enjoyment of certain trust benefits does not automatically render the trust invalid. In some jurisdictions, this may constitute as a lack of Certainty of Intention, but not in Nevis.

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Costs for creditors are Prohibitive

A creditor may have obtained a judgment against the settlor of a Nevis trust in a jurisdiction other than Nevis. However, this does not imply that it is automatically enforceable on Nevis. Nevis, like any other independent nation, adheres to its own set of laws. There is a non-negotiable rule applicable to trust matters. According to this rule, any litigation filed against a Nevis trust must be heard in a Nevis court. No exclusions.

A creditor may be surprised to learn that Nevis law mandates a deposit of US$100,000 in a Nevis bank before his or her claim can even be filed in a Nevis court. This is set aside for any court fees or other expenditures incurred by the creditor during (or even after) the trial. If a creditor loses in a Nevis court, he or she is also responsible for the defendant's fees.

A creditor suing a Nevis trust is also required by Nevis trust legislation to employ a local Nevis counsel to represent him or her in court. Again, a creditor may be startled to learn that attorneys in Nevis do not work on contingency. A creditor must pay for legal services in advance. Usually, a substantial deposit is required. As the court case advances, the amount is reduced by hourly fees and other expenses (or not). Although these expenses may appear excessive, they are totally legal and acceptable according to Nevis's legislation.

Nevis Trust Statutes

The Nevis Trust Act restrains creditors.

Nevis Trust Finishing

A Nevis trust has traditionally been the mechanism of choice for those who seek to retain their assets and shield them from unjustified demands. The 2015 modifications to the Nevis trust legislation provide a Nevis trust with even more robust asset protection protections.

The strong and explicit language of its anti-duress and anti-injunction clauses will thwart none but the most tenacious claimant. Continuously, efforts to violate the trust through the trustee or protector are thwarted. Concurrently, a settlor's right to exert some degree of control over the trust is interpreted in a broad and generous manner. The grantor can obtain benefits from it. Nevis trust law does not view this as a violation of the Certainty of Intention requirement. As if these obstacles were insufficient, there is also the cost of filing a lawsuit against the interests and assets of a Nevis trust. This may be the final obstacle that prevents any intrusion into a trust that has been correctly established in this appropriate offshore location.

The asset protection laws of Nevis allow settlors the peace of mind that their hard-earned assets and interests will be maintained and used solely for their intended purposes. Overall, this contentment and tranquility may be the crown jewel of Nevis's trust laws.