Belize Asset Protection

Asset Protection Planning & Trusts

The team of trust specialists at Glenn D. Godfrey & Co LLP has extensive expertise in the drafting and administration of trust settlements particularly settlements commonly referred to as “Offshore Asset Protection Trusts”.

Senior Partner, Glenn D. Godfrey, during his tenure as Attorney General of Belize, was instrumental in drafting and enacting the Belize Trust Act http://www.belizelaw.org/lawadmin/index2.htm. This Act forms the centerpiece of Belize’s attraction as the domicile of choice for the formation and administration. of asset protection trusts.

To understand how the Act operates, it is necessary first to understand that the law of fraudulent conveyances was not and is not now a part of English Common Law as it was received in Belize. The law of fraudulent conveyances is entirely a creature of statute. At Common Law a transfer of property could not be set aside on the grounds that it was effected to defeat the claims of creditors. It took an Act of Parliament, acting under the persuasion of powerful banking interests, to create this remedy. The Statute of Elizabeth, as it is now called, created the first fraudulent conveyance law in 1571.

To exclude the operations of the law of fraudulent conveyances, therefore, it is not necessary to amend or exclude any part of the common law, it is necessary to exclude only the operations of this particular statute. In Belize, the relevant provisions of the Statute 0f Elizabeth were re-enacted into Belize Law by Section 149 of the Law of Property Act.

The Belize Trust Act expressly excludes trusts created under that Act from the operations of this Section. Subsections (6) and (7) of Section 7 the Asset Protection Trust Act provide as follows. 7 (6) where a trust is created under the law of Belize, the court shall not vary it or set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another jurisdiction in respect of:

  • the personal and proprietary consequences of marriage or the termination of marriage.
  • succession right (whether testate or in-testate) including the fixed shares of spouses or relative; or
  • the claims of creditors in an insolvency.

Subsection (6) has effect notwithstanding the provisions of section l49 of the Law of Property Act, section 42 of the Bankruptcy Act and the provisions of the Reciprocal Enforcement for Judgments Act.

Most of the other offshore asset protection trust jurisdictions attempt to deal with fraudulent conveyance claims by mandating a statutory limitation period and imposition of other procedural requirements for the prosecution of such claims. The period may vary from six years (the standard limitation period for most actions) to two years in the case of more aggressive offshore asset protection jurisdictions. In effect, in these jurisdictions the law of fraudulent conveyances continues to apply to trusts created in the jurisdiction, subject however to time constraints.

Belize, on the other hand, adopts an entirely different approach. Rather than applying a statutory limitation period to the Statute of Elizabeth provisions, it excludes these provisions altogether. In this context the question of whether the Settlor intended to defeat the claims of the creditor is irrelevant. In the absence of actual fraud, i.e. deceit, in the establishment of the asset protection trust, the assets of a Belize trust cannot be attached to satisfy the judgment of a foreign court based on any foreign law. This is so even if the transfer is done with the specific intention of defeating the claims of creditors, and whether the claim and/or the judgment arose before or after the trust was created.

This unequivocal position of the Belize legislature is of great assistance to judges who have to consider specific applications of the Belize Asset Protection Trust Act.