Trusts and Structures
Protecting your assets and planning how you pass it on to the next generation is crucial to your peace of mind and is good wealth planning.
Trusts, Foundations and Structuring are now a fundamental part of one's estate planning. Sometimes misjudged as ways to avoid paying tax this is simply no longer true with current regulations. We are strong proponents of wealth structuring and believe that it is the best way to avoid problems and disputes in the future. There are many reasons to use a Trust today and here are a few examples.
Designate exactly who should receive what in the estate. Perhaps you’ve gotten remarried and want to make sure your children (but not your new spouse’s children) get your money. In some countries daughters are not treated equally to sons in a will and a trust can be a way to redress this.
Set limits on how old a beneficiary needs to be. Legally, your children could gain access to money you leave behind at 18. If you don’t think they’ll be ready, you could set up a trust that doesn’t grant access until they’re 21, or 25, or 35, or whatever.
Specify how the assets can be used. You might stipulate that the money can only be spent on education.
Payout at intervals. You can prevent your beneficiaries from blowing all the money at once by instructing that a trust be paid out at intervals. Maybe they get one payment when they turn 25, then at 35, and again at 45.
Insert a “spendthrift” clause. You could stipulate that the assets in the trust can’t be sued to satisfy debts. In other words, say this person spent a ton of money and got into massive debt. He couldn’t utterly bankrupt himself by sapping up all the trust fund money to pay it off.
Skip a generation. You could specify that your money should jump a generation and go directly to your future grandchildren.
Disability. One reason to consider a trust fund is if you have a child with special needs. You can help ensure he receives appropriate care through a trust, even if you were to pass away unexpectedly.
Potential tax advantages. Trusts may also be able to optimize estate tax planning.
Protect your privacy. Unlike a will that goes through probate court, which leaves public records, trusts are private. If you want to make sure that people in your extended network (or the media, if you’re famous or of public interest) don’t have access to the details of this inheritance, you could go with a trust.
Philanthropy. If you wanted to set up a Charity or Endowment a Foundation would generally be the best structure to use, creating clarity and transparency.
More recently there has been a trend to moving more and more structures and services onshore. With the current financial regulations, there is less incentive to have Banks, Trusts, Funds and Investment Houses scattered across multiple jurisdictions with different time zones, languages and legal frameworks. This presents many advantages for a country like Switzerland, which offers highly qualified staff in a financially stable state with a robust legal system.