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Trusts

A trust is a legal entity which involves an individual (the ‘Settlor’) transferring legal title of assets to another person (the ‘Trustee’) to hold for the benefit of one or more persons (the ‘Beneficiaries’) which may include the settlor. The assets held in the trust fund are not legally owned by the trust but by the trustee, and the trustee must put the interest of the beneficiaries above his own.

Our Swiss trustee company “Serenity Trustee SA” provides all the advantages of traditional trust jurisdictions with the reliability and political stability of Switzerland.  It offers you proximity to your trustee, the reassurance of trust law recognition and the facility to summon the trustee before a Swiss court.

Foundations

A foundation is a legal entity created for a specific purpose, defined by the founder.  Swiss foundations are usually directed towards a purpose of public interest such as culture, art or philanthropy.  Assets are donated to the foundation and are managed by a council in accordance with the will of the founder.

Private family foundations can be an alternative solution to trusts when considering wealth and succession planning, depending upon the personal circumstances of the family.

Candeo benefits from over 30 years of experience in the creation and management of private family foundations.

Candeo can comprehensively manage all aspects of the creation of a Swiss foundation, including its approval by Swiss authorities and its tax ruling.

Alternatively, Candeo can provide a protectorship function when an external trustee or foundation board is appointed.

Private Trust Company (PTC)

A PTC is defined as a company, incorporated in the relevant jurisdiction, which has as its limited business purpose to act as a trustee of either a single trust or a limited group of related trusts.
 
The PTC can be managed by family members and co-managed by external board members.
 

The PTC acts as Trustee of one or more Trust structures.

FAQ

A trust is a legal entity which involves a person (the Settlor) transferring legal title to assets to another person (the Trustee) to hold for the benefit of one or more persons (the Beneficiaries), which may include the Settlor. The assets held in the trust fund are not legally owned by the trust but by the trustee, and the trustee must put the interest of the beneficiaries above his own.

The extent to which a trust is a suitable instrument for your asset and succession planning is determined by your life choices and family situation.

You should ask yourself a number of questions before making a decision.  For example, would you like to be able to dispose of certain funds during your own lifetime? Should distributions only be made to your children?  And if only to your children, in what amounts and at which junctures of life?  Alternatively, should distributions be earmarked for a specific purpose?

A trust can offer considerable advantages such as protection against creditors and tax optimization.  It allows you to take consideration of geographical and legal peculiarities and can help the family assets to remain cohesive over a long period of time.

A trust can be used for the following purposes:

  • Protection of the family legacy
  • Maintenance of family wealth over generations
  • Asset protection
  • Protection for spendthrift heirs and beneficiaries
  • Prevention of asset dispersion
  • Privacy and confidentiality
  • Avoidance of probate formalities, facilitation of succession procedures
  • Simplification of cross-border investment holdings

It is certainly true that an evaluation of the costs and benefits is recommended before setting up a trust. However, in most cases the ongoing costs of administering a trust deliver healthy proportional savings which are directly attributable to the intervention of a professional trustee. As an example, your trustee will negotiate advantageous banking and legal fees on behalf of the trust.

During the past few years, trust laws have undergone major changes worldwide.  Today, with careful advice and structuring, financial assets can be held in trust alongside real estate, shares in companies and even operating companies.

The primary intent of entrusting assets to a trustee is to transfer the legal ownership of those assets to the trustee and, at the same time, to determine which people are to be the sole beneficial owners of those assets. It is therefore correct that the legal ownership is transferred, but at the same time the person who effects the transfer can remain a beneficial owner alongside, for example, his or her children.  One can also take steps that provide the possibility for a re-transfer of assets, or that provide other means of control to ensure that assets are handled exclusively in accordance with the original wishes of the founder.

The Settlor and other beneficiaries can also be involved to a certain extent in the management of the assets.

First of all, it does not mean that you necessarily have to have a trustee in that jurisdiction or that your assets are held in the Bahamas, Jersey or the Isle of Man.

However, it does mean that a trustee holds assets on your behalf and that the rules under which he does so, and the documents drawn up when the trust is formed, are based on the laws of that jurisdiction, e.g. Jersey.

At the same time, the trustee may be physically located in Switzerland, for example.

We work with leading local law firms in each jurisdiction, for example in the Bahamas, Jersey and Isle of Man, to ensure that we always meet local standards.

In the case of more complex structures, for example where there are questions regarding American or British tax law, we work alongside leading international law firms and tax consulting firms with whom we have longstanding experience.

We would also be happy to consult with your legal and tax advisors.

Switzerland recognizes the existence of trusts in its law and also regulates the legal treatment of trusts. Nevertheless, there is no trust under Swiss law (yet) and so Swiss trustees use foreign trust law.

Professional Swiss trustees are subject to strong regulatory control to ensure that they handle the assets entrusted to them in an orderly and legal manner.  In the event of disputes, the beneficial owners have a second legal recourse, namely before Swiss courts.

The geographical location of Switzerland at the heart of Europe makes it easy to arrange more frequent personal meetings with your trustee.

In addition, Switzerland, with its renowned political, legal and economic stability and unique history of independence, is an ideal location to offer your assets truly long-term protection.

The geographical proximity to many of the world's leading banks and a large pool of highly qualified professionals are further advantages.

In most cases, this is possible and we have a wealth of experience with which to assist you once we review your existing trust documents.