What HAVE TRUST
COMPANIES EVER DONE FOR US?
By PAUL SEWELL,
Trust Director, Affinity Private Wealth
companies like Affinity deal only with wealthy overseas clients and have little, if anything, to offer local residents. Although it is true the majority of the work we undertake is not for the domestic market, there are areas where, as trusted advisors to individuals and families, we are able to provide a range of services that play an important role in Jersey. Of most interest locally are the establishment of Will (Testamentary) Trusts and the formation of Family Investment Companies. These two structures can provide individuals the ability to manage personal assets and family wealth, both during their lifetime and for the benefit of subsequent generations.
M
Will Trusts These are used by local residents primarily for estate planning, most often where children and/or grandchildren are dispersed globally. Upon death, assets pass to the trust to be managed by trustees. Generally the trustees exercise full discretion, although it is common for a letter of their wishes to be left, providing guidance on how the trustees should consider managing and distributing assets. Most often the trust continues until a specific event occurs, such as when a minor (child or grandchild) beneficiary reaches a specific age, completes an educational goal or gets married. Payments can be made specifically from income or from capital, either in regular amounts or a one-off
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ost Jersey residents probably believe that trust
sum until the specified objective has been reached or the trust period expires.
Following recent legislative changes in Guernsey, where forced heirship has been revoked, Jersey could in time adopt a similar approach and a Will trust may therefore help avoid "sideways
disinheritance". This can occur when the first partner dies, leaving children from the marriage who might reasonably expect to inherit some of the family estate. If the surviving partner (who has inherited all or most of the assets) remarries but fails to make provision for those children in a new Will, there is a risk that assets will be diverted to the new spouse instead. Will trusts tend to be driven more by the personal needs of the beneficiaries rather than any tax considerations.
Family Investment Companies These are simply private companies whose shareholders are family members. The governing documents of such companies are tailored to suit the family’s specific and unique needs, for example, defining how certain family members will benefit with respect to voting rights, income and capital
distributions. Experienced trust company officers will often serve as directors on the boards of these companies, sitting alongside family members and providing an independent perspective and much needed support. Other corporate functions can also be undertaken in these arrangements, such as acting as company secretary, maintaining financial records and undertaking statutory filings. A major advantage of these companies is that they offer a flexible asset holding
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