Trust
common law trust
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A legal relationship under common law in which a settlor transfers assets to a trustee, who manages them for the benefit of beneficiaries.
The parties are the settlor, the trustee, where applicable a protector, and the beneficiaries. All of them count as controlling persons under the CRS.
In practice
In practice, a trust file contains the trust deed, any deeds of amendment or appointment, the letter of wishes and evidence on the identity of the settlor, trustees, protector and beneficiaries. Distributions and changes of trustee or protector are recorded with dates, because banks and tax authorities assess the trust on the basis of these documents. The family office keeps the roles current and coordinates with the trustee, who remains responsible for administering the trust.
Distinctions and common mistakes
A trust is not a legal entity; the trustee holds the assets and acts for the trust. A common mistake is to treat discretionary beneficiaries as irrelevant until a distribution occurs, although banks often require them to be identified from the start.
Relevant in: EU-wide
Related terms
- Controlling person (CRS)
- Under the CRS, the natural person who controls a passive non-financial entity – for trusts and foundations in particular the settlor or founder, the governing bodies, the protector and the beneficiaries.
- Protector
- A person or body that supervises the trustee of a trust or the board of a foundation and holds certain consent rights.
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