Huriya Private’s role in extending Trustee Services

At Huriya Private, we intend to protect, manage & regulate the succession of your family wealth. As an independent service provider we work with your lawyers, bankers and advisors without creating any conflict of interest or regulatory restrictions.

Huriya Private draws in a highly qualified team of trustees that help ensure that your intergenerational wealth and assets are preserved and protected. Focusing on the long-term dynastic security for you and your family.

Huriya Private’s role in extending Protector Services

As a Protector, Huriya Private drives varied duties and tasks which are conscripted by the settlor or their kin; these can be altered over time to accommodate needs and circumstances. We would be pleased to discuss how we may be of assistance to you.

 

How can Huriya help?

We specifically design our service offering as per our client’s requirement. We provide assistance in the following manner:

  • Legal responsibility – to carry out the terms of the trust effectively, we handle the legal responsibilities entrusted on us, which have your best interests in mind.
  • Record maintenance – we carry out the tax and accounting duties while maintaining up-to-date records.
  • Tax Planning – We guide with the right plan to eliminate taxes for the Settlor and the heirs.
  • Knowledge and Quality – Our trustees are well experienced with the right skill sets and are abreast with latest industry developments.
  • Protect your legacy – we provide flexible asset protection, succession planning,  distribution methods and saving option that allows you to use funds for emergency situations or implementing appropriate wealth management.

The History

The trust is an English (Anglo-Saxon) concept and has been in existence for many centuries. The objects of trusts were intended to regulate the succession of family wealth. This was achieved through the holding of assets by trusted and secured friends or other parties to protect the assets against spendthrift children or confiscation by third parties. 

 

More recently, over the last 50 years or so, the concept of the trust has been extended to include commercial transactions and is extensively used as a valuable instrument in international estate, inheritance and tax planning. Whilst the concept of the trust is essentially an Anglo-Saxon (common-law) device, many western countries (with different legal codes, such as Napoleonic, Roman Dutch or Greek based legislation) have now formally recognised the trust instrument by way of an international multilateral treaty called the Hague Convention on the Law applicable to trusts and on their recognition.

The Concept

The various types of trusts vary in complexity but they have one common fundamental feature:

A “person” mostly being an individual (the settlor) transfers and assigns certain assets to A “person” being either an individual or a company (“the trustee”) which agrees to hold these assets (“the trust fund”) in its namebut for the benefit of another person (“the beneficiary”) on certain terms and with certain powers (which are usually set out in the trust deed). The assets comprising the trust fund are legally held and registered as owned by the trustee and the trustee is under a duty, enforceable in the Courts, to hold those assets and the income arising from them for the benefit of the beneficiary(ies).

The above relationship can be summarised as follows:The trustee has legal title to the trust assets and the beneficiary has beneficial or equitable title.

The Elements

The Settlor: is the (legal or natural) person who establishes the trust by way of gift of property and/or of contribution of estate to be held by the trustee in accordance with the settlor’s intentions.

 

The Trust Fund: represents assets transferred to the possession of a trustee under the terms of the trust. Assets can be cash, securities, real estate, shares of captive companies, equity units, works of art etc., and should be officially transferred to the trustee and be at his disposal. Normally each type of asset is held by a separate company owned by the trust.

 

The Trustees: is the legal representative of the trustand administers the trust in accordance with the terms of the trust deed. The trustee could be a corporate entity or a natural person.

 

The Beneficiaries: are the persons benefiting from the creation of the trust. For practical reasons they are construed as the beneficial owners of the trust fund to the degree and extent defined in the trust deed. They may be defined by name or by reference to a class of people (e.g. the settlor’s children etc.).

 

The Purposes: Many trusts do not have a beneficiary, human or otherwise, at all. A trust can instead be established to provide for payments towards the achievement of a purpose.

 

The Protector: usually chosen from among the close friends, family or independent professionals who are familiar with family and affairs of the settlor. Depending on the wishes of the settlor the functions of the protector can vary. Usually the protector is not engaged in current issues but he has veto authority regarding important decisions, for example capital and income distribution, designation or removal of a beneficiary, replacement of the trustee or appointment of a new trustee. The protector is not required in the trust concept.

 

The Trust Deed: is the document which sets up duties and powers of the trustee regarding the management of the trust fund, determines the period of trust, names beneficiaries and regulates the distribution of income and capital of the trust among beneficiaries or in their interest. With due consideration of his power in managing the trust fund the trustee considers changes in the situation of the settlor and beneficiaries, takes into account the wishes of the settlor during his life and after. In most trust jurisdictions trust deeds are not registered by the state, allowing the settlor, beneficiary and trustee still some confidentiality.

The Use and Advantages

Asset Protection: Mitigating Liability. Wealthy and professional people can be the targets of law suits by creditors or others. A trust can protect assets from these mitigations.

 

Succession planning: The use of a trust may enhance the sometimes required flexibility in succession and inheritance planning. The settlor enjoys to a large extend freedom in defining beneficial entitlements.Furthermore a trust is intended to protect property rights; the trust simplifies estate transfer to future generations as well as assets restructuring and diversification. The property and other assets transferred to the trust are not the property of the settlor and cannot be taken away or adjudged (e.g. by divorce).

 

Family members protection: A trust also protects the interest of young and/or disabled beneficiaries (who may be under guardianship of third parties) and persons who are handicapped physically or mentally or likely to be in this state in the future. The trust is a flexible and individual solution, which allows identifying the circle of beneficiaries, their shares and terms of payment.

 

Confidentiality: The need of confidentiality is satisfied by a legal and economical segregation of the trust assets from the personal assets of the settlor. 

 

Tax Planning: Trusts can be widely used for national and international tax planning purposes. 

The Settlement

The trust Settlement becomes valid upon the signing of the trust deed by the settlor and the trustees and the payment and or transfer of the initial trust fund.

The Taxes

The taxation of trusts depends on the applicable legal and fiscal rules at the domicile of the involved persons especially of the settlor and of the beneficiaries.

The Rules of the Game

Before starting with the evaluation and incorporation process of a Trust, entities or structures you should be aware and take into consideration the recent changes of international tax and legal norms.

 

As one could gather from media throughout the world, member states of international organisations such as G20, OECD, EU etc. have come to agree to significant changes in international taxation. Various new regulations such as US-FATCA, CRS lead as of 2016 to an international exchange of banking details. Through these initiatives the banking secrecy of various countries such as Luxembourg or Switzerland has been seriously hampered if not run obsolete. 

 

International organisations and a growing number of countries consider tax offences as predicate offences to money laundering and thus criminal acts which may lead to fines, jail, confiscation of assets, revocation of professional licences etc. Exposed to such consequences are not only clients but also service providers such as employees of banks, lawyers, tax advisors, trustees and any other persons or institutions acting as financial intermediaries. 

 

Due to these reasons we are only in a position to be involved in set-ups which are fully compliant with national and international applicable norms and regulations. 

 

In order to protect our clients, us as well as any other parties involved we will require an opinion of a tax advisor, lawyer or other qualified professional confirming that the trusts, entities and structures you intend to settle or incorporate with us and thereafter have administered by us are fully in line with the legal and fiscal rules and regulations applicable in your country of domicile and/or residence and thereafter where mandatory, the trusts, entities or structures are properly disclosed to the authorities of your country of domicile and/or residence.

 

Further the clients should be aware that only structures which are handled and lived according to standards of good practice are recognised and therefore achieving the purpose. For example clients should not have signatory rights on bank accounts in order to avoid the Trust to be considered sham and therefore losing its recognition.

The Next Steps

         1.Analysis of legal and tax situation of the client and his family. 

The target will be to evaluate a fully compliant set-up respectively a structure with minimal tax-burden as well as minimal disclosure of information.

 

2.Presentation of possible solutions including cost forecast.

 

3.Discussion and tailoring to fix final solution including legal and tax opinions if necessary.

 

4. Incorporation

Talk to one of our consultants to learn how you can pass and preserve
wealth privately and efficiently.

Want to learn more about Trusts & Foundations?

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FREQUENTLY ASKED QUESTIONS

Why should I have a trust?

Trusts can help pass and preserve wealth privately and efficiently. It can help reduce taxes.

Do you need a lawyer to create a living trust?

There are no attorneys involved in the process of creating a living trust.

What is the difference between a will and a trust?

A will is a document that directs who will receive your property after your death and it appoints a legal representative to carry out your wishes. A trust is effective as soon as you create it.

Why should I put my house in a trust?

The main reason individuals put their home in a living trust is to avoid the costly and lengthy probate process at death.

Can a trust be broken?

A trust can only be “broken” if the creator decides to undo it.

Who owns the property inside a trust?

Trust property is owned by the trustee.

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