There are various types of Trusts:
Inter-vivos (among the living)these protect wealth benefits for the Settlors themselves or for other beneficiaries through the Settlor's lifetime and can be revocable.
Testamentary (established by Will in Probate)
this is irrevocable - i.e. Settlor is not available to change the document, and it is subject to probate with all its attendant drawbacks.
Special Purpose Trust
i.e. Insurance Trust, Blind Trust or Charitable Trust.
Note: Most Trusts are irrevocable which provides a greater legal distance between the Settlor and the assets; may avoid taxes under circumstances where the beneficiary or Settlor is moving to a higher tax jurisdiction; entail the transfer of ownership of assets and income and can be kept offshore.
The complexity of a Trust depends on:A trust to be truly effective needs to be specifically written to meet the Settlor's requirements and should be the subject of independent legal and accounting advice.
Type of assets.
- Distribution of income and assets.
- Beneficiary, both primary and contingent.
- Protectors - i.e. to ensure that the Trustees carry out exactly the terms of the Trust Document.
Trusts were originally used primarily in tax planning, but are now much more frequently used for asset protection.
IMT is able to form trusts in several jurisdictions.
Selection of the jurisdiction may depend on the needs of the client.