Our initial discussions will seek to clarify:
Your objectives in establishing the trust
Who will benefit from the trust
The nature of the assets that form the trust
In doing so we will gain an understanding of how you arrived at where you are today, and your aspirations for the future. There are often ancillary issues to investigate at the same time, and the trust plan may form part of a wider tax or inheritance plan.
Based on our discussions, we will draft and agree the governing documentation. Once this is agreed, the documentation is executed and we take custody of the assets, which can vary in nature, including:
Chattels - such as cars and other valuables, investment properties, etc
Traded investment assets
Generally, we work with family advisers and local experts to produce a mix of expertise tailored to your individual or family requirements.
DISCRETIONARY TRUST: the trustees have the power to choose who benefits, how much they receive, and when.
INTEREST IN POSSESSION TRUST: the trustees must pay the trust income to named people for a specified period (usually life). The trust may terminate at the end of this period, or may continue as a Discretionary Trust.
ACCUMULATION AND MAINTENANCE TRUST: often set up to look after children. The income, and perhaps capital, is used to assist with the maintenance of the child, by settling school fees, for example. Any surplus income is accumulated to the capital. The trust ends at a point when the child has become suitably "mature" - usually before the age of 25.
EXPRESS TRUST: the terms of the trust are explicitly agreed between the settlor and the trustee. Most modern trusts are explicitly set down in a lengthy trust deed.
IMPLIED TRUST: where the actions of the parties show a trust arises. An example might be a vendor holding a deposit for goods pending their receipt. The vendor may be considered to be trustee of the deposit in favour of the purchasers.
CONSTRUCTIVE TRUST: sometimes the courts will impose a trust as a remedial mechanism for ensuring that a fair outcome arises.
ASSET PROTECTION TRUST: in some cases the creation of a trust can be registered. Providing the settlor was solvent at the time, the courts will uphold the trust and shield its assets from the claims of future creditors.
RETAINED POWERS TRUST: the settlor of a trust can sometimes retain powers over the assets. These might include powers of investment, but could include others. Where the trust is constructed together with a tax mitigation strategy, the retention of powers by the settlor may serve to negate tax benefits that could otherwise accrue.
CHARITABLE TRUST: created where the objects are exclusively charitable. Gibraltar has its own registry of charitable trusts.
NON-CHARITABLE PURPOSE TRUST: whilst trusts have traditionally been established for the benefit of individuals, the use of trusts in commercial transactions has seen the rise of trusts created for purposes rather than people.
LOAN TRUST: funding for the trust is achieved by way of a loan. This provides an IHT efficient vehicle allowing for return of capital via loan repayments whilst allowing for growth value of trust assets within a life insurance bond which will remain outside the creditor’s estate for IHT purposes. Loan repayments can be matched against annual 5% life policy withdrawals.