|
A trust is an arrangement where property real, tangible or intangible is managed by a person or organisation for the benefit of others. The settlor entrusts or transfers some or all of his/her property to people or an organisation, known as the trustee/trustees. The trustee/trustees hold legal title to the transferred property, but are obliged to hold that property for the benefit of others or organisation known as the beneficiaries The trust is usually governed by a trust deed which sets out the terms and conditions of the trust. A protector of the trust may be appointed and usually they have the power to dismiss or appoint a trustee in an express inter vivos trust. The settlor may also give a letter of wishes (his/her desires or wishes) to the trustees, but there is no legal obligation on the trustees to exercise the wishes of the settlor contained therein.
Generally,trusts can be created during a persons life or after death in a will. A trust document usually contain the three certainties
| Certainty of Intention |
( Clear intention to create a trust ) |
| Certainty of subject matter |
( The trust property must be clearly identified ) |
| Certainty of objects |
(The beneficiaries must be clearly identifiable ) |
Some Types of Trusts
| Constructive Trust |
is one imposed by law as an equitable remedy to correct some wrongdoing |
| Express Trust |
This is the most common type of trust and results when the settlor deliberately settles property into trust usually created by a trust deed or a will |
| Fixed Trust |
The entitlements of the beneficiaries are fixed by the settlor eg a trust for a minor |
| Hybrid Trust |
This combines both an element where the entitlements of the beneficiaries is both fixed but also allows some discretion to the trustees on how the remaining trust property is to be paid to the beneficiaries after the fixed element have been paid out. |
| Implied Trust |
When some of the legal requirements are not met by an express trust , but are presumed to exist. |
| Private and Public Trusts |
A private trust is one which has one or more particular beneficiaries whereas, a public trust ( charitable trust ) has some charitable end as its beneficiary |
| Spendthrift Trust |
is one where the property is settled into trust for the beneficiaries who are not able to control their spending. The trustees decide how the trust funds will be spent for the beneficiaries |
| Testamentary Trust |
This is another name for the settlors last will and testament
|
Some useful common purposes for which trust are used
| Privacy |
The terms of a trust are not public |
| Spendthrift Protection |
Safeguard against inability to manage money |
| Asset Protection |
The trust assets are ring fenced against predators . such as creditors |
| Wills and Estate Planning |
The trustee ( Executor ) administers the deceased estate as laid down in the will |
| Corporate Strustures |
Used by companies in their business arrangement |
| Tax Planning |
By using trust structures, there may be significant tax advantages and therefore tax avoidance of tax liability rather than by not using a trust |
| Provide for minors |
trusts created to provide for minors eg education or money held on trust until they reach a certain age. |
Trust services are principally provided by our partners in Belize, duly licensed by the International Financial Services Commission to engage in trust formations, offshore trust management and provision of trustees services
|
Trusts
