Cyprus Asset protection Trust GR

WHY A TRUST?

Here’s your predicament:

You have significant assets. A profitable private business. An investment portfolio that generates capital gains, interest and dividend income. Perhaps some real estate, at home or abroad.

You also have a family. They will inherit your wealth once You’re gone.

Last Will and Testament? Could work … but the probate through courts can be arduous, complex and costly. Inheritance taxes will also make a killing. Ultimately, the end result could be your lifes’ work damaged, scattered and in disarray.

Here’s another:

You are in a high-risk profession. You have worked hard and accumulated some wealth. Yet You are vulnerable to frivolous lawsuits, aimed at your business and at your personal assets, too. If You have meaningful assets, it’s not a matter of “if”, but “when” it will happen.

One final example:

Your personal life has been wild and complicated. Marriages and divorces. Some troublesome relatives. Promiscuous kids. But there is also that one special person who really deserves your love. The one who is worthy to take over your hard-earned fortune and carry it into the future. When all is said and done, it’s your decision to make.

But how?

WHAT IS A TRUST?

To start with, a trust is not a company. It’s different.

A Trust is a legal arrangement. Under a Trust, an owner of a certain asset – the Settlor – transfers to another person – the Trustee – the ownership title of the asset.  Under the terms of the Trust, the Trustee is obliged to hold, protect and use the asset for the benefit of certain persons named by the Settlor – the Beneficiaries.

The crucial advantage of a Trust is the legal separation between the ownership (legal title) of an asset and the beneficial interest (actual economic income and benefits) arising from that asset. The Settlor establishes the trust. The Trustee is the legal owner of the trust property. Yet the Trustee is compelled to act in the best interests of the Beneficiaries. The Beneficiaries are the ones to whom the economic benefits from the trust property fall – albeit strictly in the manner set out by the Settlor.

Why is it good?

For the Settlor: What does not belong to You can not be taken away from You. Safety through separation. At the same time, determine exactly how the assets will be used, by whom, when, how much and to whom will they ultimately accrue – during your lifetime and beyond. It’s what a last will does, only better.

For the Beneficiary: Enjoy the income without carrying the burden of ownership. Respect the boundaries set by the Settlor.

For the Trustee: Well, there is not much in it for the Trustee. The Trustee serves as a custodian and legal guardian of the trust property. For that service he is entitled to a professional fee, as determined by the terms of the Trust. While the Trustee owns the trust property and has significant functional powers, its ultimate fiduciary duty is towards the Beneficiaries and, implicitly, towards the Settlor. That obligation is enforceable by the courts under the trust laws.

The Settlor may also appoint a Protector to the Trust. The Protectors’ function is to oversee the Trustee. The Protector has powers to remove a Trustee for breach of fiduciary duty or to veto certain decisions by the Trustee if those are deemed to be against the best interests of the Beneficiary. It is not mandatory to appoint a Protector, however, it is a common practice and provides additional assurance to the Settlor and the beneficiaries.

For passive asset protection AND succession planning all in one package, Trust is probably the most effective tool there is.