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As an integral part of its international estate planning practice, Henley & Partners set up and administer private foundations and trusts - both classic elements in international tax and estate planning. We give advice with regard to establishing such structures in the most suitable jurisdictions where they can be administered tax free. Our services are comprehensive, provided by specialist consultants and lawyers, independent trustees and other highly qualified professionals, and focused on each client's individual circumstances and requirements. We combine the expertise of these professionals in their relevant fields to provide you with excellent advice and service. |
 Government Building,Vaduz/Liechtenstein
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Why Establish a Trust or Foundation?
A trust or a foundation enables assets, which individuals may prefer not to hold themselves, to be accommodated in an effective legal structure. It will allow the grantor to make provision for beneficiaries with complete confidentiality. In the most suitable jurisdictions there is no requirement for trusts or foundations to be registered with any authority, therefore only the trustee and the settlor need to know of its existence.
A trust is irrevocable if it is not possible for the settlor to terminate the trust without the approval of the trustee. Discretionary means that only the trustee is authorised to determine who the beneficiaries are and the amount they will receive; in other words, the settlor loses control over the trust capital. The settlor can, however, make his whishes known in respect of the beneficiaries in a "Letter of Wishes", as well as the amount of their acquisitions, the time of acquisition, etc. In addition, he can include specific provisions in the trust deed but still the trustee has the ultimate control over a discretionary trust.
Special powers can be given to a Protector to oversee the actions of the trustees or board of directors of the foundations. These may include powers to remove and appoint trustees or investment advisors and a veto over proposed distributions.
Advantages of a Trust or Foundation
A trust or foundation is able to operate in a tax free environment. This means that it is usually possible, with careful planning, to enhance the value of the assets held by a trust or a foundation by accumulating income and capital gains free of tax.
Most civil law systems of continental Europe, Japan, and Latin America have forms of forced heirship rules. Offshore trusts or private foundations may be an effective way to avoid heirs' claims, and, at the same time, provide tax-free lifetime and death benefits to beneficiaries chosen by the grantor. Also, trusts and foundations may provide a wealthy individual with greater privacy than he or she would have with respect to probate in his or her home country.
An offshore trust or a foundation also provides excellent asset protection. Because the trust/foundation is governed by the laws of the jurisdiction under which it is formed and where it is administered, it serves as a shield to protect the grantor's assets against unreasonable litigation and unjustified claims.
Making the Right Choice
Trusts and foundations are among the most flexible and efficient legal structures. However, the law of trusts and foundations is a complex field and there are many fundamental issues to be considered, for example onshore legal recognition, domicile, banking secrecy laws, taxation, place of administration, location of assets held by the trust/foundation, residence and citizenship of the beneficiaries and trustees, and the situs and governing law of the trust/foundation. Choosing the right trustees is important because the trustees have significant fiduciary duties to the beneficiaries. Choosing the appropriate jurisdiction is important because the jurisdiction's banking, privacy and tax laws may impact the effectiveness of the trust or foundation. Henley & Partners are in the best position to assist you in finding the best solution for your individual situation.
By aiming to realise practical solutions based on solid research, specialisation and international practice, Henley & Partners attract clients who are accustomed to expecting the best. All our consultants focus on their core areas of expertise and can therefore assure you of a single standard of service - first class throughout.
We analyse each client's situation carefully, point out available options, develop a plan of action and make it happen. By working closely together as a team, our consultants ensure that their knowledge and experience are shared so that the specific details of each client's case are considered from all relevant perspectives.
No matter how complex your needs are, the global network of Henley & Partners will be able to advise and assist you. Henley & Partners provide all clients with individual advice and comprehensive, yet cost-effective solutions. Please contact us for more information and individual advice.
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