Global Wealth Structuring, Art Advisory, and Other Services
Wealthy families, no matter from what country they are from, face similar problems in
the areas of tax sensitivities, privacy concerns, business continuity and probate issues, but
the biggest problem is how the family manages once the father and mother are gone.
Without proper planning much can go wrong. Whether they cover the transfer of assets to
one generation or several, successful estate plans go far beyond a simple will. A sound
plan not only identifies and minimizes tax exposures but also makes sure that the assets
go to the intended heirs or other beneficiaries- be they spouses, children, other family
members or charitable institutions- at the appropriate time and in the appropriate
More often than not, this involves the use of trusts, holding companies, partnerships,
insurance and other structures.
Trusts were created during the Crusades. When English knights went in search of the
Holy Grail, someone had to mange their land and property. Their wives could not, as
women had no legal standing at the time, so the knights’ property was put in trust for
someone else to mange. Over the years, common law recognized trusts. Today a trust is a
legal entity that can hold and manage assets for one or more beneficiaries for as long as
the trust exists. All trusts have the same general structure. A trust is established by a
“grantor”(the creator of the trust) who transfers assets to a trust that is managed by the
“trustee” for the benefit of the “beneficiaries” in accordance with the terms of the trust
agreement. The trustee may be an individual, a trust institution such as a
or trust department, or both could be co-trustees. For international clients, large banks
provide trust services through trust companies organized in locations such as Bahamas,
Cayman Islands, Jersey, Singapore, Switzerland and etc.
The trustee receives fee income for managing the trust. The amount of fee income
depends on the market value of the trust and the services provided.
There are three types of trust arrangements widely used in offshore private banking:
Revocable Living Trust. Also known as a “living trust” or “inter vivos trust”, it is
the most commonly used trust in private banking. It allows the grantor to retain
control over the assets during his or her lifetime.