A fiduciary structure can help preserve your wealth and offer you greater flexibility over the management and distribution of your assets. A trust is established when a person, known as the Settlor, transfers assets to a Trustee. The Trustee is required to administer the trust assets and is responsible for managing and distributing the assets to the beneficiaries in accordance with the terms of trust.

Trusts allow for someone else to manage the property, which can be useful when the property management requires significant time or skill; for example, in the case of management of real estate properties, a commercial business, an investment portfolio, etc. Trustees manage the assets per orders detailed in the trust deed and follow the trust regulation of the country in which the trust is established.

The assets which are placed into a trust are called Trust Properties and can include anything which can be legally transferred, like: cash, securities, property, boats, cars, antiques, copyrights, land, pension funds and complete companies.

The effect of creating an offshore trust is to shift the burden of property ownership onto a trustee, while retaining the benefit of the property for the beneficiaries.

The services we can offer you are:

Establishment of an offshore trust

Trusteeship and related services

Administration of the trust funds and guidance

Offshore Trust accounting and maintenance of asset ledgers

Reporting and filing as appropriate

Types of trust

There are a large selection of types of trusts to choose from including life interest, discretionary, accumulation and maintenance and so forth. Often jurisdictions utilize different terminology to describe the types of trusts, as well as the components of the trust, which can be confusing.

Beneficiary Trusts

In a beneficiary trust, the trust creator transfers assets to the trust for the use of his beneficiary which is specifically named in the trust document. Whilst beneficial trust can be of value for asset protection and perhaps inheritance tax purposes, because there is a specifically named beneficiary/several, they are all but useless for tax planning and privacy purposes, the Revenue Authorities in the country of residence of the beneficiary will soon become aware of the “inheritance”.

Offshore Asset Protection Trusts

What differentiate an Offshore Asset Protection Trust from a Discretionary Trust is that the beneficiaries will be entitled to receive income and capital from the trust as detailed in the trust deed. OAPT is generally used by either private individuals or corporate to hold their assets in a form which makes them untouchable under any court order imposed against them.

Discretionary Trusts

In a discretionary trust the beneficiaries do not have a fixed entitlement or interest in the trust funds. The trustee has the discretion to determine which of the beneficiaries are to receive the capital and income of the trust and how much each beneficiary is to receive; Revenue Authorities regard beneficiaries as the owners of the trust assets and income. The trustee does not have a complete discretion. The trustee can only distribute to beneficiaries within a nominated class as set out in the terms of the trust deed. Since no specific beneficiary is named in the trust document, revenue authorities cannot tax any potential beneficiaries, although tax is theoretically payable on the receipt of the proceeds of the trust by a specific beneficiary. We will advise fully on such structures, including ideas such as using credit/debit cards for drawing cash onshore from an offshore trust.

Trust Structure & Administration

The major components of a trust of any type are:

The Settlor/Grantor

the person or entity who formulates the trust and who settles his assets into a trust

Deed Of Trust

is the trust legal document which contains all the permutations and combination of what the trust and its controlling Trustees can and cannot do according to both the wishes of the Settlor and the laws of the jurisdiction where the trust is written.

Trust Property

the assets which the Settlor places into the trust. Depending on the type of trust, settled assets do not need to be specified in the initial Deed of Trust but may be added later.

Trustee(s)

the named individual, individuals or company agreed by the Settlor to administer his wishes according to the Deed of Trust. Often a professional Trust Agent within the jurisdiction of the trust, the Trustee has absolute control over the trust assets.

Beneficiary

is the person /persons to whom the Settlor wishes the trust assets or income thereof to be paid to according to conditions dictated in the Deed of Trust. Depending on the type of trust, Beneficiaries do not need to be specified in the Deed of Trust, but can be made known to the Trustees privately.

Protector

a Settlor can name a third-party individual to ‘oversee’ a trust to ensure that the Trustee is administering the trust according to his wishes.

Letter of Wishes

a Settlor can write a Letter of Wishes alongside a Deed of Trust which spells out exactly what actions he wishes the Trustees to take under differing sets of circumstances. This Letter is totally private between Settlor and Trustee and whilst not legally binding, is an excellent guide for a Trustee to follow, especially if the Settlor is no longer in contact with the Trustee for any extended period.

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