What is a Trust?
A Trust is a legal arrangement in which the Settlor (the asset holder/ client) transfers legal title of his/ her assets (the Trust Assets/ Funds) to an individual or institution (known as the Trustee). The trustee holds and manages the assets for the benefit of others – the settlor may specify the people who will benefit from the assets, including him/ herself or others (known as Beneficiaries). The legally binding document that outlines the terms of the trust agreement is called the Trust Deed, Deed of Settlement, or Declaration of Trust. It is also common practice for the settlor to appoint a Protector so as to reserve some control over the trustee. The protector may be given a wide variety of powers, including the discretion to remove and appoint trustees and settle their remuneration, and to approve the addition or removal of discretionary beneficiaries.
The relationship between settlor and trustee is known as a fiduciary one. A fiduciary (the trustee) is someone who has undertaken to act for and on behalf of another party in a particular matter in which circumstances give rise to a relationship of trust and confidence. The trustee is required by law to act in the best interest of the beneficiaries, and to invest the trust assets prudently.
What can I transfer to a Trust?
Trusts can hold a wide range of assets, including cash, securities, shareholdings in a financial holding company, life insurance policies, real estate, and in some cases, fine art. These assets can be located almost anywhere in the world.