According to Black’s Law Dictionary, trusts are simply, "A right of property, real or personal, held by one party for the benefit of another. A confidence reposed in one person, who is termed trustee, for the benefit of another, who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust."

The individuals or entities within a trust are as follows:

• Settlor, Creator or Grantor, entity(ies) establishing the trust;
  
• Trustee, entity has the right to manage, hold, and use and the duty to protect the asset(s) on behalf of the beneficiary;
  
• Beneficiary, the entity that has been designated by the Grantor to receive the benefits derived from the management of the trust by the faithful efforts of the trustee.
  

The are many countries in the world which grant tax-favored status to certain types of trusts which has led both individuals and businesses to employ trusts to facilitate estate planning.

The 1990’s saw the emergence of the Asset Protection Trust (APT) as a principal vehicle for the preservation of assets against frivolous litigation. The APT was enhanced considerably through placement within the offshore financial community where favorable laws prohibited enforcement of judgments originating in foreign jurisdictions. Consequently, assets placed into these APT’s were not subject to seizure with a possible exception for cases of fraud, money laundering or drug trade profit

There are three major offshore entities that can be employed to separate your assets from your personal estate and net worth: The IBC, APT and Foundations. We suggest each of the entities brings unique attributes to your asset protection strategy and that each should be utilized to strengthen your exposure to lawsuit judgments. Generally, the following, non-all-inclusive list specifies individuals who may benefit from trusts:

• Professionals with a high risk of litigation, i.e., physicians/surgeons, manufacturers, architects, accountants, builders, business owners, etc.;
• Individuals with a net equity of more than $500,000 free and clear in your residence;
  
• General partner in real estate of other high-risk partnership;
  
• Officers or directors of a U.S. corporation;
  
• High net worth individual about to marry;
  
• The appearance of "deep pockets" resulting in high exposure to litigation;
  
• Individuals who lease out equipment or rent out commercial property, or own apartments.

It is both possible and desirable to combine the benefits of IBC’s with trusts to further distance one’s assets from those who would seek to take them. Incorporating a multi-jurisdictional approach, where the IBC is established in one country and the trust is established in another, presents the asset assailant with substantial legal expenses, long time delays, and probable rejection of claims.

The following chart illustrates one possible structure that combines several entities with an offshore trust: