Due to the often complex nature of the role of trustee, many clients choose to appoint a professional trustee to act on their behalf such as Old Mutual International Trust Company. Old Mutual International Trust Company is an expert in its field and therefore the numerous benefits can be as follows:
By holding assets within an Isle of Man trust structure, the legal ownership of those assets has been transferred from a client’s ownership to that of the trustees. Therefore, these assets are no longer considered your clients personal assets. This is still the case even if the client is a potential beneficiary under the trust.
It may be worth considering appointing offshore trustees of a trust as a form of protection in the event of anything happening to your client’s personal assets in the future. As the trustees own these assets then they should not be considered as part of any claim against your client’s personal assets. However, in any jurisdiction, it is unlikely that a trust would be valid if its sole purpose was to avoid payment to creditors for known debts.
The terms of a trust, unlike those of a Will, are private and can offer confidentiality. The information contained in a trust is not a public document unlike, in certain jurisdictions, a Will. Where there are complex family situations or the person declaring the trust would like some privacy over who can benefit then a trust may prove an appropriate vehicle.
Depending upon the jurisdiction in which your client lives or owns property, they may not be free to decide who should benefit from their estate when they die. In many countries, laws of succession define specific rights for heirs, known as forced heirs. Argentina, Brazil, Spain and France are examples of countries which have such prescribed rules.
The primary purpose of forced heir ship is to ensure that individuals make proper financial provision for their dependents. A trust governed by the laws of a country other than that in which your client lives can sometimes be used to provide more control over asset distribution in these circumstances.
The law in the Isle of Man recognises an individual’s right to create a trust under Manx law, even if the individual’s home jurisdiction does not. The Isle of Man courts will not enforce the rights of dispossessed heirs under a trust set up in the Isle of Man. The forced heirs disinherited by the trust may try to challenge in a different country. Whilst the Isle of Man courts would claim jurisdiction, it would be for the foreign courts to decide if they are willing to hear the action.
Without the possibility of personal complications, a client can be confident that when Old Mutual International Trust Company act, they are not biased when acting in accordance with the provisions of the trust deed. Whereas a friend or family member might struggle with the complexities of trust law, especially if the trust is subject to a different jurisdictional legal system, clients who appoint Old Mutual International Trust Company can be confident that the relevant Isle of Man regulations are not being breached.
It is important to ensure that the trust assets are held in a jurisdiction noted for its stability, both political and legal, as well as its regulatory environment. For these reasons the Isle of Man is a popular location.
When considering professional trustees, it is extremely important to consider carefully the many jurisdictions where professional trustees are based. Costs cannot be overlooked, but where the services are linked to an established financial services strategic partner these costs can be significantly reduced.
Professional trustees will not be suitable for all clients, but the potential benefits, cost savings arising from use of their expertise and peace of mind they can offer your clients may well be worth considering.