What is a family trust
A family trust is intended to protect a family’s assets from high taxation through an asset protection scheme. It is generally established when large sums of money have been acquired that are at risk of heavy taxation. The purpose is to benefit members of your family for the future, by transferring ownership of the assets within a legally binding contract.
To learn more about setting up a trust, please view our Set up a Trust services page.
Family trust explained
Like a general trust, a family trust is an important asset protection tool. It is a legal contract which transfers responsibility from the original owner of the assets to a group of people or a company. The person or company is located in an offshore jurisdiction and are responsible for managing the family’s assets. In order for a family trust to be a legal entity, it must consist of particular parties.
A family trust involves three main parties, the settlor, the trustees and the beneficiaries. The settlor is the person who originally owns the assets; the trustee is the individual or company that has been chosen by the settlor to manage the entity and ensure that the assets are protected in accordance with the settlor’s wishes. The beneficiaries are those that ultimately benefit from the formation of the entity; these can include the settlor’s children or relatives.
A family trust provides a mechanism to protect family assets from high taxation thresholds, and to pass assets on to future generations. Transferable assets include intellectual property, real estate and bank deposits, amongst other tangible and intangible assets.
A family trust is governed by a number of laws and conditions. These are drawn up into a deed which is specific to that particular jurisdiction. It is therefore important that you choose the correct jurisdiction to establish your asset protection entity within, which has lucid and comprehensive laws and regulations.
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