A trust, in its simplest form, is a transfer of assets (shares, real estate, etc.) from one party (the settlor) to another party (the trustee) for the benefit of a third party (the beneficiary). The Trustee becomes the legal owner of the assets transferred and manages these assets for the benefit of the beneficiary or beneficiaries. The settlor may also be the beneficiary of a trust. An Advisor advises the Trustee as to the best use of the assets owned by the trust. A Protector may be appointed to ensure that the Trustee is properly managing the assets of the trust. The Protector may remove a Trustee if he/she is not managing the trust wisely and appoint another Trustee.

Trusts that are formed in offshore jurisdictions are called offshore trusts. Offshore trusts are used for tax planning and asset protection. In an offshore trust the legal ownership of the assets lies with trustees who, in the case of St. Vincent, would be based in a zero tax jurisdiction. Income derived from the assets of the trust is therefore not subject to taxation. Since assets are legally transferred to the trustee, the assets are protected from subsequent lawsuits, bankruptcy, divorce, etc.

Investors looking for asset protection should seriously consider setting up a trust in St. Vincent and the Grenadines. Its trust law combines the best features of international trust law, appealing to both clients of common law and civil law countries. There are strict trustee confidentiality regulations as well as strong asset protection provisions, in particular regarding creditor protection. The settlor has great flexibility in the structuring of the trust instrument. There is freedom from forced inheritance as well as from community property laws.