If you would like to contribute to this survey, please email Richard East on r.east@trust-world.net
1. How long have trusts been used by private investors, as a vehicle for their asset planning?
2. How are trusts set up and are they registered and open to public scrutiny?
3. Are trusts used for domestic purposes or are they purely for international investors?
4. Can trusts be used to hold the shares in companies registered in the same jurisdiction, especially shares in international business companies or similar zero-taxed vehicles; if so, what are the advantages of doing so?
5. Are there specific advantages of using international trusts to assist in overcoming forced heirship provisions of the jurisdiction of the person that is setting up the trust?
6. What advantages are there in using international trusts as a part of a tax planning regime?
7. What are the particular advantages of using international trusts to protect against creditors?
8. Can trusts be used to protect beneficiaries from their disabilities or extravagance?
9. Can trusts be used to treat income and capital of trust assets in different ways?
10. Can trusts be used to avoid the need to obtain a Grant of Probate on the death of the settlor and in other ways to be used as a substitute for a Will?
11. Is the setting up of a trust and the contents and details of the trust instrument confidential? What limits are there on this confidentiality?
12. What ancillary services are available in a jurisdiction relevant to an international trust operation, such as international banks, trustee services, investment advisers?
13. Is it necessary that a trust set up in the jurisdiction must be managed there or may the trustees comprise individuals or companies situated elsewhere?
14. May the settlor retain the power to decide on the investment of trust assets, the identification of beneficiaries or the allocation of assets to such beneficiaries? What are the consequences of exceeding this?
15. What particular markets are attracted to trusts in the jurisdiction?
16. Who is the person in the jurisdiction with whom the details of the advantages of setting up a trust may be discussed and who should be instructed to set one up?
17. Who is usually engaged to draft the trust instrument; is it a lawyer in that jurisdiction, a standard form from a trust company or similar persons in the country of residence of the settlor, or by a service provider in the jurisdiction?
18. What is the nature of trustees available in the jurisdiction; are they trust companies belonging to banks, associates of law firms, independent trust companies or branches or subsidiaries of international trustee companies?
19. In setting up a trust in the jurisdiction by a foreign settlor, what KYC procedures are required in respect of the settlor, trustees and beneficiaries, and what other anti-money laundering laws are applicable?
20. What is the minimum amount of cash or assets which are recommended to make the expenses of setting up and managing a trust worthwhile?
21. Before an investor elects to set up a trust, he might consider the advantages of alternative arrangements. What advantages are there in these; for example, joint bank accounts, private foundations, insurance or some form of corporate structure or a straightforward power of appointment or an outright gift)?
22. What is the duty of the adviser to ensure that the client understands the nature of the proposed trust and what procedures are adopted generally to ensure that the settlor understands the nature of a trust?
23. What measures are there to combat the abuse of trusts set up to conceal assets, particularly in respect of fraudulent activities or tax evasion by the settlor?
24. Are purpose trusts possible in the jurisdiction and, if so, what are their principal applications?
25. Can creditors attack trust assets directly instead of taking action against the trustees and what measures have been enacted to frustrate action taken by “trust busters”?
26. What procedures are recommended to be followed by trustees to minimise their risk (such as maintaining accurate minutes of meetings and file notes of telephone conversations)?
27. Are professional indemnity insurance policies easily available to trustees and is it the current practice for these to be taken out?
28. What are the obligations on trustees to disclose trust information and to whom would this duty be owed?
29. What is the position relating to trusts engaging in trade or other commercial activities (and is it usual for such activities to be conducted through a company whose shares are held in trust)?
30. What procedures are adopted by banks before setting up a bank account for a trust (references, anti-money laundering procedures etc.,)?
31. Are trustees required to follow any legal provisions relating to the maintenance of trust assets or finance or is the limit to their authority only as may be contained in the trust instrument or by the protector/guardian?
32. Does a trust have to produce annual accounts and, if so, to whom are copies of these accounts routinely supplied?
33. Are there adequate investment advisers and stock exchange and other facilities available for investing trust funds in the jurisdiction where there are liquid assets of the equivalent of $5 million?
34. What reporting requirements are required of trustees in respect of a trust’s financial position which are required to be made to the Regulator, to the settlor or to any other party?
35. Many trusts are now integral parts of more complex arrangements known as ‘Family Offices’. What is the principal use of trusts in such arrangements?
36. What is the status of the jurisdiction in respect of requirements of the OECD on Exchange of Information, the FATF in respect of anti-money laundering laws and the IMF in respect of international banking standards?
37. What are the advantages of the jurisdiction which are marketed to various sectors of the world to encourage their HNWIs to locate their wealth through trusts?
38. Where the trust is discretionary, what procedures should a settlor and beneficiaries expect that the trustees should follow before making a distribution?
39. Where the trust is discretionary and the trustees are not geographically close to the beneficiaries, what procedures are recommended to enable the trustees to have adequate knowledge of the beneficiaries to exercise their discretion properly to fulfil the terms of the trust?
40. Beneficiaries may from time to time approach trustees requesting a distribution in their favour. How are such requests to be handled, bearing in mind the duties of a trustee are to act in a manner fairly between all the beneficiaries where the trust is discretionary?
41. Settlors may contact the trustees requesting that some of “their” trust fund be used in a particular way. How are such demands met?
42. Where a trustee is incompatible with the beneficiaries, may a trustee seek to be relieved of his responsibilities?
43. What rights do beneficiaries have to receive accounts and other information concerning the trust and who else might be included within these rights?
44. Is there any specific legislation which legitimises the retention of any powers by the settlor?
45. What limits are there on the legitimacy of a Letter of Wishes and how are such instruments properly created and used?
46. What have been the latest developments in trust law and regulation in the jurisdiction and what changes are planned or expected?
47. Are private trust companies a feature of trusts in the jurisdiction and are there firms or organisations who could host such a private trust company?
48. Are there any particular laws relating to the setting up of a private trust company? If so, are there any precautions which should be taken to ensure that the trust remains valid?
49. If the majority of trustees are resident outside the jurisdiction, is it necessary to have one of them, or an agent, resident in the jurisdiction?
50. Once a trust is set up, what access can the public or government, local or foreign, have to details of the parties involved in the trust or trust assets under OECD Exchange of Information agreements, double taxation treaties or mutual assistance agreements? Is information revealed to foreign tax authorities automatically or solely in response to enquiries properly made under these international agreements?
51. What are the main types of trusts and their particular uses (for example, interest in possession, discretionary or accumulation and maintenance trusts)?
52. Can any type of assets be placed in a trust (examples should be given of types of assets which may be included which are in addition to the normal range of cash, securities and land)?
53. What are the formal requirements which are required such as certainty of intention of subject matter and of objects?
54. Following the previous question, are shams a danger in the jurisdiction and what are the consequences of an arrangement being declared a sham?
55. What is necessary to make a trust properly constituted, i.e., to make it active after the trust instrument has been signed; that is, to make the trust properly constituted? What are the consequences of this is not fulfilled?
56. Can trusts be set up by a declaration by the settlor that he henceforth holds assets which he already owns on trust for someone else, hence becoming the trustee, or is it necessary that there should be a transfer of the settlors’ assets to the trustee accompanied by a written instrument by which the trustee undertakes to hold the assets for the beneficiaries?
57. What powers are implied under the trust legislation to trustees and what powers need to be, and usually are, expressed in the trust instrument?
58. Can a settlor be appointed a trustee?
59. Can a settlor be made a beneficiary?
60. Are Protectors/Guardians usually incorporated into trusts in the jurisdiction; if so, what are the specific rules relating to them and, if none, how does the general law treat them?
61. Do protectors/guardians have fiduciary responsibilities?
62. To what extent do beneficiaries have any control over the trustees or over their appointment or dismissal?
63. Can beneficiaries indicate to the trustees how they wish the trust to be managed or may they terminate the trust when the law relating to such termination is fulfilled (such as under Saunders v Vautier)?
64. What is the standard of care required under the law for trustees and what measures exist to ensure an appropriate level of performance?
65. If a trustee fails to take an appropriate measure, what powers are there to correct the error which may be taken by the trustees, (e.g., by agreement with the beneficiaries) or with the consent of the court, e.g., ...............................................................?
66. If the trustees fail to fulfil the general terms of their duties or the particular requirements in the trust instrument, what action may be taken by the settlor or by the trustees particularly with regard to the possible need for cross-frontier negotiation or litigation?
67. What are the limits that trustees may claim indemnity for costs and expenses of running the trust and opposing outside claims and is any procedure advisable before engaging in litigation (such as a Beddoe application)?
68. Are the assets of a trust held by trustees considered in law to be separate from the trustee’s personal assets and thereby insulated from claims against the trustees personal creditors?
69. On transfer of assets to the trustees, the settlor must arrange for the legal title of the assets to be transferred and undertake whatever transfer procedures are required by the place in which the assets are situated; if this transfer does not take place entirely as proposed when the trust is set up, does this affect the validity of the trust?
70. What duty of care and other criteria are applied to the investment of trust funds? Can this duty be delegated by the trustees?
71. Can trusts migrate into or out of the jurisdiction and may they change their proper law?
72. Is the jurisdiction governed by the Hague Convention on the Recognition and Enforcement of Trusts and, if not, to what extent are foreign trusts recognised?
73. What powers are there for beneficiaries to seek replacement of trustees?
74. How are vacancies as trustees filled and what is the normal number of trustees who are appointed to a fixed interest or discretionary trust?
75. Under the law, what criteria are applied to persons licensed to deal with international trusts to determine whether they are ‘Fit and Proper’ persons to undertake this work according to the law?
