During the last two years, much has happened which will impact the use of offshore trusts as the principal planning tool for the future. In the United Sates, new legislation aimed specifically at the used of foreign trusts, and in the United Kingdom changes proposed in the Finance Bill, will reduce the number of planning opportunities in which a trust can play a leading role. In some circumstances, it has made sense for trusts to be distributed to beneficiaries. These changes have resulted in clients and their advisors looking for alternative estate planning strategies. Insurance is one alternative to consider.
The use of insurance in planning for wealthy individuals is on the increase in many jurisdictions due to the different manner in which insurance is taxed in comparison to trusts. Insurance has also been used by some advisors as an alternative to trusts when clients have preferred the concept of a legal contract to that of the relationship between beneficiary and trustee.
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