Trusts: An estate planning solution
Families, and their estates can be complex for a variety of reasons. Such complexities are not only a direct result of the nature and size of the estate itself but the number of family members as well as the dynamics of the relationship between them, may add to the complexity. In such complex scenarios why not try and resolving it with a plan which covers both one’s lifetime and after one’s death?
Trust can be a great solution in this regard. The Trust is a flexible tool that can be used in planning the succession of complex and large estates. Iin view of the fact that the trust can be drafted in a very ad hoc manner, it can take into account one’s specific needs, and can remain in place for a period of 125 years. It is ideal for long-term planning involving multiple generations.
The Trust can be drafted in way to give access to assets only to certain family members (Beneficiaries). Specific conditions or the happening of a particular event (e.g. when the Beneficiary is 25 years old) can be included as conditions to get access to assets. Equality between beneficiaries can also be achieved but not necessarily attained at the same point in time or using the same assets. In a nut-shell, a trust enables one to control (through the terms of the trust) how one’s estate is to be distributed, when and in what amounts, both during one’s lifetime as well as.
Given also, that it is impossible to foresee the future and the events that will happen to us and our family members, it is also possible for the trust instrument not to cater for the exact manner in which one’s estate is to be divided. Certain amount of discretion may be granted to the trustees, which enables them to take into account the circumstances of each family member (Beneficiary) before making any decision to distribute any assets held in trust.
Planning the manner in which one’s estate is to be divided is key, and trusts are ideal for the implementation of such plans. By way of example, Trusts enable one to set aside an asset base which is to be used by family members only in particular circumstances, e.g. paying for medical expenses and treatment in case of serious illness; paying for expenses relating to education or the starting of a business enterprise. Also, Trusts not only ensure that one’s estate is not dissipated unnecessarily but also protects it from being the target of or cause for disputes between family members and spouses,
Concluding, the Trust has a wide variety of benefits and can be tailor made specifically to your needs and those of your family members, however, careful planning is required.
Its important to keep in mind that a Trust which is used for estate planning is tax neutral, such that there will be no fiscal advantages or disadvantages when using a trust. Professional Trustees will be a licensed company and will act in all instance in accordance to Maltese Law and regulations.