Understanding Trusts
A trust is a legal arrangement used for asset protection, estate planning, succession, and tax structuring. For a trust to exist, all three core elements must be satisfied:
1️⃣ Settlor
The individual who creates the trust and transfers assets for the benefit of others.
2️⃣ Trustee
The person or entity responsible for managing the trust assets.
Assets must be fully segregated from the trustee’s own assets.
Cash, for example, is held in separate offshore or designated accounts.
3️⃣ Beneficiaries
Those who will ultimately receive the benefit.
If multiple, their identity must always be ascertainable
Modern Use of Trusts
Originally used for estate planning and supporting individuals unable to manage assets, trusts today are also widely used for:
- International tax planning
- Wealth protection
- Separating legal ownership and beneficial interest
- Enjoying flexibility in income vs capital distributions
