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: