Trust management and fiduciary services

The trust is a contractual relationship in which the original owner of the asset (the settlor) transfers all or part of its assets to the trustee, with the purpose that the trustee:

• manages,
• administers,
• exercises ownership rights,
• preserves and increases its value,
• contributesthe assets to the beneficiary or group of beneficiaries specified by the settlor.

The participants of fiduciary management

There are three participants in fiduciary management: the trustee (fiduciary), the beneficiary and the settlor (property owner). All three can be natural people or a legal entity. All three roles can be filled by more than one person, and this is usually the case with trustees and beneficiaries.

You can add almost any asset to trust management, but the following are the most common:

• properties,
• personal goods,
• securities,
• property rights,
• expired and not yet expired financial claims.

Legal peculiarities of trust management

• Assets under management are not considered taxable in most countries (tax transparent), while in some countries they are considered independent taxpayers and have their own tax number.
• Property transferred in a timely manner is not part of the estate or the matrimonial property community, nor can it be claimed by creditors.
• In many countries, trust management is a financial licensed activity.
• The asset under management doesn’t have legal capacity, so the trustee acts on its behalf.
• The grantor designates the beneficiaries and the time and conditions of becoming the beneficiary, the extent and form of the participation, or the termination of the beneficiary status. A beneficiary can even be either a trustee or an unborn person.

If you are interested in the possibilities offered by fiduciary management, or if you would like to compare trustsolutions from several countries, please contact our colleagues at one of the contact details here.