What is a Trust and the Basic Concept?
A trust is the relationship created at the direction of either an individual or other legal entity, in which one or more persons, namely trustees hold assets subject to certain duties as prescribed in the Trust Deed for the benefit of others.
The trustees are effectively the legal owners of the Trust assets but the beneficiaries have equitable interest. There are various types of trusts available and the most suited one will differ according to the particular family or individual circumstances and objectives.
The person or entity which creates the trust is effectively the settlor whilst those who benefit are the beneficiaries. Apart from the trustees who hold the legal ownership and makes decision over the trust assets there can also be a protector. The latter will can veto powers over some of the trustees decision making capabilities and can act as enforcer of the trust deeds rules.
The following simple example illustrates the trust concept. A parent transfers shares to Castle Trust to manage for a child, with intention to give the dividends to him each year until he becomes 21 years of age, at which time he is to receive all the shares outright. The parent is the settlor, Castle Trust is the trustee, the stock is the trust asset, and the child is the Beneficiary.
The trustee has the obligation to act impartially in the best interests of the beneficiaries. In order to guide the Trustees in the making of decisions a settlor can provide either a letter of wishes or memorandum of wishes. This document will provide guidance upon distribution, it does not fetter the discretion of the Trustees and is not legally binding on the Trustees.
The terms of the trust including the duties and powers of the trustee and the rights of the beneficiary is established in the trust deed on creation of the trust and conferred by the settlor.
At Castle Trust, we have vast experience of serving as trustees for our clients, providing preservation of your assets across generations. We are qualified and licensed by the Financial Services Commission in Gibraltar to serve as corporate trustee.
Combining our expertise with our clients needs - different types of trust
There are a number of different type of trusts as listed below which we are able to set up -
- Discretionary Trusts
- Purpose/Charitable Trusts
- Bare Trusts
- Interest in Possession
- Asset Protection Trust
However, the type of trust required is dependent upon the settlor’s circumstances and objectives, we would request our clients to meet with our Team, discuss their personal requirements objectives and expectations before proceeding further and then we would recommend the type of Trust which would better suit our client’s needs.
For further information, or if you would like to speak to one of our team, please contact us. Alternatively, if you would like more information about our company management services, please click here.
Disclaimer: This website contains general information only, without any warranty that the content is accurate, complete or fit for a particular purpose. It does not constitute professional advice. The Castle Trust Group does not accept any responsibility for loss which may arise from reliance on information contained in this website and recommends that for a specific matter a suitable professional is consulted.