Spotlight On...

Contact:

Andreas Athinodorou, CEO Tel: +357 22 418 888

E-mail: andreas.athinodorou@aspentrust.com Web: www.aspentrust.com

individuals and families, so for big corporations we very often have to look at setting up Trusts for the key executives or members of their families. This is why we use trusts for both, for our private wealth clients and also for some of our C-level executives within big corporate clients.

Q

What challenges are often faced where trusts are concerned?

The trust and fiduciary industry in this era of regulation, transparency, anti-terrorism and anti- money laundering is under a magnifying glass. It is an industry that provides a level of protection and an additional level of privacy in a time when talking about privacy is considered to be blasphemous. So the major challenge faced by the trust industry at the moment is the bad press that the word privacy and managing affairs privately has in our era. Yes, the trusts have been used in the past for activities that perhaps were not clear but that can be said about any other industry, including banking and corporate services. The challenge that the trust industry faces today is to clear its name and once again be seen as a legitimate tool for what it was intended for: estate planning, proper tax planning, planning across jurisdictions, defending one’s property from potential litigation etc.

Q trust?

Before one ventures into setting up a trust it is very important to seek a specialist’s advice. The advisor will look at the specific circumstances of the person that is looking into the trust. In order to identify the best options for protecting assets and wealth from uncertainty, whether this is political, social, economical or even personal, one has to really evaluate the particular circumstances of the people involved. Once these are evaluated we look at the various options available, for example the types of trusts or the jurisdiction where the trust

What should one take into consideration when setting up a

is kept, the choice of trustees and protectors, the choice of banking arrangements and even the agreements between the trustee and whoever else would be looking after the assets of the trust. So there is no straightforward answer whether to use a Cyprus Trust vs. a Jersey Trust, but we really need to look at all these other parameters to ensure that they meet the client’s specific goals.

Q

How can tax liabilities be planned for and dealt with efficiently to mitigate

their impact?

Tax liability is always something we look into when we plan for the setting up of a Trust. A potential tax liability, in the hands of an individual that is the settlor of a property, can actually be deferred by settling the assets into a trust. This effectively changes the requirements for taxation from those on an individual to those on the level of a trust, which allows various possibilities of tax planning, for deferment or even minimisation of taxes. Again, it’s a very broad subject one has to look at in terms of the specifics of the individuals involved.

Q

If you could, what would you change about the industry?

One big thing I would like to change in this industry is to have more transparency and more professional education for the people involved in the industry. Trusts are a very powerful tool to use for estate planning and they can really help families with assets to plan across generations. But in the hands of the wrong people they can be misused and actually create bad press for the entire industry, as it probably has done in the past. The minute we become more transparent with the use of these tools and the purposes for using these tools, and also ensure that the people involved are properly regulated and have a professional education in trusts, the whole industry will have a more positive image and more people will be aware and start using Trusts.

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Trusts are a very powerful tool to use for estate planning and they can really help families with assets to plan across generations.

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