The trust concept dates back to the days of the Crusades in the 12th and 13th centuries when land ownership was based on the feudal system and there were concerns about management of the landed estate and inheritance when the land owner went to fight in the Crusades. Their solution was to give the land and prized possessions, in trust, to a third party, who was usually a faithful friend, to look after while the owner was away with the understanding that these possessions would be returned to the owner on his return.
Today a trust is a more formal agreement between the parties, (the Trustee and the Settlor with his/her Beneficiaries) whereby the Settlor donates, usually by outright gift or possibly through a loan account, the assets into a separate legal entity (the trust). The trust is therefore a legal structure which separates the legal ownership from the beneficial ownership of the assets.
- Asset Protection
The assets in a Trust are quite separate from an individual”s estate and therefore can provide protection from creditors, forced heirship rules and, in some instances, family disputes.
- Estate Planning
Trusts are an efficient means of taking care of future generations ensuring that assets are carefully managed to provide for long term educational needs for children and grandchildren and to provide for the ongoing well being of family members.
- Wealth Preservation
Assets may be accumulated into a family trust allowing for ease of management and enhancement of the assets.
- Efficient tax planning
A trust may provide certain tax relief to non-residents of Guernsey, from capital gains taxes and income taxes during their lifetime and, ultimately, inheritance taxation and estate duties as the trust assets do not form part of the deceased person”s estate.
- Protection from Political Unrest
Trust assets cannot be unilaterally seized by governments in times of political or economic upheaval provided the assets are held outside of their jurisdiction. Trust assets can only be attacked following evidence of criminal activity.
Every Trust is as unique as the person wishing to form a Trust. Cannon is experienced in advising on the required structure taking into account individual circumstances and offering a personal and professional service to all their clients.