A trust is a legal arrangement, almost invariably in
writing (The Trust Deed), whereby the original owner
of assets (the Settlor) transfers those assets (the
Trust Property) to another party (the Trustee), who
subsequently holds those assets for the benefit of one
or more persons (the Beneficiaries).
The Trustee is required to hold the property in accordance
with the obligations imposed by the terms of the Trust
Deed, and in particular, to administer the property
of such persons (the Beneficiaries) as are named in
the Trust Deed. The Beneficiaries can be named specifically
by name, or generally as members of a class of Beneficiaries.
Beneficiaries are those individuals or organizations
named to benefit from trust assets. Beneficiaries have
recourse in Law to compel the Trustees to act in accordance
with the terms set forth in the Trust Deed.
The Protector’s role is to oversee the Trustee to
ensure that the Trustee is acting in the best interest
of the Trust and the Beneficiaries. The Protector’s
powers are derived from the Trust Ordinance and the
Trust Deed and can include the powers to remove the
Trustee, appoint new and or additional Trustees.
Settlor is the legal term for the person who establishes
a trust. The written document that creates an international
trust is called a "deed of settlement". A
Settlor can provide the Trustees with an informal and
confidential Letter of Wishes which provides guidance
as to how the Trustees might exercise their discretion.
The Letter of Wishes does not form part of the Trust
Deed and can, therefore, be amended at any time.
If you were to map out a classic offshore trust arrangement
in flow chart form, it would look roughly as follows: