Technical article

Is US$500,000 Too Small for an Offshore Trust?

Most come from firms that sell trusts or trust services, so the figures are their advice.

By Neil Solomon · 3 min read

Picture a couple in Colorado with US$500,000 in savings and a home they own outright. A website says an offshore trust protects what they have built. Another says it is only for the very rich. They ask a plain question: will the fixed fees eat it?

Here is what the sources say, in one table. Most come from firms that sell trusts or trust services, so the figures are their advice.

The law firms speak about advice and not about rules. They are suggesting who is a typical candidate. A Cook Islands law firm says that below its figure the fixed costs take too large a share, and domestic options come first.

The sums behind that are simple. One provider's blog puts an all-in US$5,000 to US$10,000 a year at 2% to 4% of US$250,000. It is 0.5% to 1% of US$1 million. At US$500,000 the same range is 1% to 2%, as an example worked from the blog's numbers. Another firm's example says that at US$200,000 the first-year cost is more than a tenth of the protected pool.

Yearly trustee fees also differ by place. One law firm lists Nevis at about US$5,000, Belize at US$2,500 to US$5,000, and Cayman and the Bahamas at US$5,000 to US$20,000. A provider's blog says Nevis and Belize lower the break-even point for smaller pools, and that Cayman suits eight-figure wealth. The first is a law firm's list (tier C) and the second a provider's claim (tier U).

The US trust companies add another view. Their lowest accounts mostly run from US$1 million to US$3 million. Those are US domestic trustees. They show that even at home, US$500,000 sits at the bottom of what many firms list.

You might say: "A lawyer's minimum is a sales line. They want bigger clients." That is a fair way to read it, and the table is built so you can see it. Every figure above comes from a firm that sells the service. The sums still show where fixed costs begin to weigh. The same fixed amount is 2% to 4% of one pool and 0.5% to 1% of a pool four times larger.

You could ask a trustee directly for its smallest account and its first-year cost in writing. You could ask what a domestic option costs for the same amount, and what each protects.

This touches family. A trust of US$500,000 might be the family's largest single asset. A fee of 1% to 2% a year comes out of that asset every year, for the couple and later for heirs.

If you have looked at a trust at about this size, what did you decide and why? Share it here. Someone with a similar amount may find your reasoning helpful.

Figures are estimates for planning, based on public data. Date read: October 2026.