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Trusts: A Tool in Business Governance Planning (Part 1)

April 28, 2021by Mohammed Rahali

IN BRIEF

Trust is an entity allowing a Third-party, the Trustee which could be a private trust company controlled by the settlor (the donor, the client who is vesting his interests into the Trust for the beneficiaries’ benefits; beneficiaries amongst which he could be), to hold assets for the benefit of beneficiaries appointed as per a Trust Deed is the legal framework: The Trust deed instrument specifying the terms governing the Trust, can be drafted in several ways to specify the conditions under which assets should pass to the beneficiaries.

Trust could be used for estate planning, business governance planning, confidentiality planning, investment fund planning, asset protection planning by segregating the family’s private assets from the business ones to limit the reach of the business creditors, securitization purposes, off-balance sheets purposes.

Trust could be used for estate planning, business governance planning, confidentiality planning, investment fund planning, asset protection planning.

WHAT IS THE CONCEPT OF TRUST?

 

TRUST STRURCTURETRUST STRURCTURE

The Settlor will transfer his property into the Trust by vesting his legal ownership into the Trustee. The Trustee will hold and manage it for the benefit of the beneficiaries by holding the legal ownership over the property called the Trust Fund. The beneficiaries will be holding an economic or beneficial “ownership” depending on the nature of the Trust (revocable, irrevocable, discretionary, fixed interest….). The Beneficiaries will receive distributions from the Trust and enjoy all the profits and benefits of the Trust. A protector (settlor himself, a family member, a trusted advisor…) could be appointed to protect and watch over the Trustees.

A Trust usually avoids probate applicable in case of a will, allowing the beneficiaries to still enjoy the benefit of the Trust despite the death of the settlor (who created and settled property into the Trust) without being subject to obtain probate from a court on the demise of the settlor.

 

WHAT ARE THE BENEFITS OF TRUST?

•Protection of your estate

•Protection of privacy and confidentiality

•Save estate duty

•Avoiding probate

•Avoiding forced heirship rights

•Mitigating Sharia Law reach

•Protecting Family wealth

•Control of your wealth

•Business succession planning

•Protection from creditors

•Tax Mitigation

•Charitable purposes

•The Trust deed instrument specifying the terms governing the Trust can be drafted in several ways to specify the conditions under which assets should pass to the beneficiaries

 

LET’S GET IN TOUCH

If you wish to discuss the concept and how trust works, or any other legal entity, feel free to contact us.

For Support and assistance on this matter Get in Touch with our Corporate Team Today 

Wincore specializes in TaxEstateCorporate and Fiduciary matters. We provide pragmatic, flexible and efficient solutions to individual entrepreneurs, startup businesses, foreign and local SMEs, multinationals, wealthy international families, HNWIs and UHNWIs.

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Mohammed Rahali

Managing Partner | E: m.rahali@wincoreadvisory.com | M: +971 (0) 55 138 9591

*Wincore Advisory Group DMCC is not providing any Legal and Financial Services.

© 2020 Wincore Advisory Group – Tax | Corporate | Fiduciary | Residency 

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