Trust
Fiduciary management
A legal structure: you transfer assets to a trustee who holds them in the interests of the beneficiaries. Used for asset protection, inheritance, and confidentiality. Popular in the UK, Jersey, and the BVI.
- What it is
- An arrangement in which assets are transferred to a manager (the trustee) for the benefit of beneficiaries
- Why
- Asset protection, inheritance, planning
- Parties
- Settlor, trustee, beneficiaries
- Important
- Requires transparency towards the tax authority and the bank
- Can you prepare
- Yes: build the trust for its purpose and disclose it honestly
In plain words
A trust is a legal arrangement in which you (the settlor) transfer your assets to the management of a trusted person or company (the trustee), who deals with them for the benefit of the people you have named (the beneficiaries). Formally the assets are no longer yours — they belong to the trust, but they operate under the rules you set when it was created.
Why it is needed: protecting assets from risks and claims, orderly inheritance without lengthy procedures, planning the transfer of capital to children and confidentiality within permitted limits. Trusts are especially common in Anglo-Saxon law and are often used by wealthy families for long-term planning.
An important point: a trust is not a way of hiding assets from the tax authority. Modern rules require beneficiaries to be disclosed and often tax the trust’s income on the settlor or the beneficiaries (anti-avoidance rules, CFC-like rules). That is why a trust is built transparently and with the tax consequences calculated, not as a tool of concealment.
Why trusts are used
How a trust is structured
- The settlor (you)
- The trustee (manager)
- Beneficiaries
- Transferred to the trust
- Managed under the rules
- For the benefit of the beneficiaries
- Asset protection
- Inheritance
- Planning
- Disclosure of beneficial owners
- Tax on the settlor/beneficiary
- Not concealment
How to create a trust
- 01Define the purpose and assets
- 02Choose the jurisdiction and trustee
- 03Establish the trust and transfer the assets
- 04Disclosure and tax accounting
- 05A working structure
What you need to know
- Assets are transferred to a trustee for the benefit of beneficiaries
- Used for asset protection and inheritance
- Especially common in Anglo-Saxon law
- Not a way of hiding assets from the tax authority
- Requires disclosure of beneficiaries and tax accounting
Common mistakes
- Treating a trust as a tool for concealing assets
- Not disclosing the beneficiaries to the bank and the tax authority
- Not calculating the tax consequences for the settlor
- Choosing a jurisdiction without regard to your own rules
- Setting up a trust “on paper” with no real management
What this means for a BRIDGES client
We help build a trust for your purpose — asset protection and inheritance — transparently and with the tax consequences calculated. We choose the jurisdiction and the trustee and prepare the structure so that it solves planning tasks rather than raising questions with the bank and the tax authority.
Frequently asked questions
01 /What is a trust, in plain words?
An arrangement in which you transfer assets to a manager (the trustee), who deals with them for the benefit of the beneficiaries under rules you set. Formally the assets belong to the trust.
02 /Does a trust hide assets from the tax authority?
No. Modern rules require beneficiaries to be disclosed, and a trust’s income is often taxed on the settlor or the beneficiaries. A trust is a planning tool, not a concealment tool.
03 /Why is a trust needed?
For asset protection, orderly inheritance, transferring capital to children and confidentiality within the law.
04 /Who is the trustee?
A trusted person or company that manages the trust’s assets for the benefit of the beneficiaries under the rules set by the settlor. Choosing a reliable trustee is critical.
05 /Is a trust’s income taxed?
Often, yes — on the settlor or the beneficiaries, under anti-avoidance and CFC-like rules. The tax consequences are calculated in advance for your residence.
06 /How does a trust differ from a foundation?
A trust is a relationship without a separate legal entity; a foundation is a legal entity in its own right. The choice depends on the jurisdiction and the planning goals.
See also
Read next
This material has undergone editorial review by BRIDGES.
Planning asset protection or inheritance?
We will build a trust for your purpose transparently and with the taxes calculated — so that the capital passes on without disputes or risks.