Trust is popular instrument used for planning family wealth, and it forms an efficient secure structure, which is protected against risks of the trustor and beneficiaries (such as creditors’ claims, divorce proceedings, etc.).
Trusts have long history (they were first used in the 13th century) and are widely used in common law countries.
Trust is an agreement between the trustor (usually, the head of a wealthy family) and a licensed trustee. Pursuant to this agreement, assets are deemed as no longer belonging to the trustor and are legally held by trustee. Therefore, the trustee ensures asset management for the benefit of beneficiaries stated in the trust deed.
Thus, trust enables the family head to withdraw from possession of assets, without distributing those to beneficiaries, so that integrity of assets is maintained and the trustor’s instructions on use, withdrawal and inheritance of trust assets are followed.
Actions of the trustee are supervised by the trust protector stated in the trust deed. The protector can change the trustee or ban some most significant actions.