Saint Kitts and Nevis
Trust and Asset Protection

Analyzing ways to protect money: Trust vs foundation

9/15/2023 8:00:00 AM
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If you're analyzing ways to protect money and wondering why open a Nevis trust, or if you should establish a foundation instead, you’ll find this article useful. This trust vs foundation comparison will help you go to the core of each structure and understand its essence and best uses.

What is asset protection?

In general, asset protection structures help an individual or a family to protect their wealth from circumstances that cannot be predicted. This includes confiscation, court rulings, ex-spouses’ claims, and creditors.

Although this may seem counterintuitive, protecting a family's fortune over time can be even harder than generating it. Luckily there are certain tools that come in handy for people who are wondering “how to protect my money”.

We cannot answer the question “what is asset protection” without explaining the concept of trust and foundation, even though a good financial structure goes way beyond these two. For a better understanding of what a safe, long-term financial plan looks like, check out our article Forever Free and our product based on the five flag theory. Now, let's move on to the trust vs foundation comparison.

Trust vs foundation: What do they have in common

Let's start with indicating what these structures have in common and you'll find that it's a key aspect: their essence. Both a foundation and a trust are based on the principle of separating the asset ownership from the owner. This means that, legally, the assets are no longer the property of the person in question. Therefore, lawsuits, claims, and even taxes, in some cases, cannot affect the assets because the person is no longer their legal owner.

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Trust vs foundation: What are their differences

While they both separate assets from the owners, the trust and the foundation differ in their legal structures and in how they accomplish their goals.

For better understanding, we'll say that the trust is not a legal entity, but a contract between two parties: the original owner and the person who will look after the assets. In legal terms, these are the settler and the trustee.

On the other hand, a foundation is a legal entity that the owner creates to safeguard his or her assets. In general, these are used for charity purposes, while trusts are ideal for estate planning and inheritance, especially when analyzing ways to protect money for the generations to come. If you want to know more, we’ve recently explained the technical differences in depth

Panama vs Nevis

Once you understand why establish a trust or a foundation, it will be time to choose the right option, and Mundo has two excellent jurisdictions for each: Panama vs Nevis.

Panama is known as the bridge of the world because of the Panama Canal and is home to a wide array of financial benefits for individuals and companies. This is one of the main reasons it has become an epicenter that attracts immigrants not only from the region but also from every corner of the world.

Among its many structures and residency options, Panama offers the possibility to create a foundation that is very much like Lichtenstein's only at lower costs. Read an article about the Panama Foundation to find out more.

On the other hand, we have the king of trust: Nevis. An island that belongs to the federation of Saint Kitts and Nevis and that also brings enormous benefits for the nomad capitalist. Besides offering a powerful citizenship by investment program, which was actually the first one of its kind, the country is an excellent business hub. Nevis in particular has quite a protective legislation when it comes to asset protection. If you're wondering why establish a trust, Nevis has all the answers because it comes with many interesting features. For example, it only recognizes local court rulings which means that foreigners will have a hard time setting aside a Nevis trust. This brings a particularly high level of protection for those wondering “how to protect my money”. What is asset protection? The answer is simple and the best example is Nevis, a synonym for estate planning and wealth management.

Disclaimer: this article holds generally information about trust vs foundation, however, before establishing one of these structures, make sure you are properly advised by a certified professional. Only through a formal consultation will you obtain precise details as to costs, fees, and requirements. 

Panama vs Nevis: analyzing ways to protect money with Mundo

Why establish a trust? Why open a Nevis trust or a Panama foundation? At the end of the day, it's all about peace of mind. It's about knowing that everything you worked so hard for is safe and available both for your future and that of your loved ones.

The technical differences between foundation vs trust can be better discussed during a consultation with an expert. Luckily, Mundo’s experts, lawyers, realtors, and advisors have wide experience in Panama and Nevis, opening bank accounts, establishing trusts, incorporating companies, and helping clients relocate abroad.

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