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A trust is a legal arrangement between a settlor (sometimes known as trustor) and a trustee, where
- the settlor gives the trustee the right to hold the title of the settlor’s assets
- trustee manages the assets for the benefit of a third party, the beneficiary.
- protector administers, as well as the ability to terminate, the trustee
What trusts are for
- Succession & estate planning
- Wealth protection
- Wealth planning
- Tax Mitigation (legally)
Trust & its impact to AML/CFT
Due to its confidentiality and complex structure, it is harder to identify the beneficial owner of the assets. The identification gets complicated if the settlors and trustee are corporate entities where they have their own layers of ownership.
It is an ethical and legal relationship of trust between two people and consists of duty of care, duty of loyalty, duty of good faith, duty of confidentiality, duty of prudence and duty of disclosure.