Trust Essentials – Swiss Capital

How does a trust work?

A trust is a fiduciary arrangement where a settlor transfers the ownership of specific assets to a trustee, who is responsible for managing and administering them for the benefit of one or more beneficiaries designated by the settlor, according to the rules outlined in the trust deed.

1. The parties involved

A trust involves four main parties:

Settlor: The person or entity who establishes the trust, transfers the assets, and defines the rules for management and distribution.
Trustee: The entity or individual responsible for managing the assets, with the duty to act exclusively in the interests of the beneficiaries and in accordance with the terms of the trust.
Beneficiaries: The individuals or entities who receive the benefits of the trust (assets, income, or specific advantages).
Protector (optional): A figure appointed to oversee the trustee and ensure the trust is managed according to the settlor’s wishes.

2. How is it established?

The establishment of a trust involves four key steps:

Defining the objectives: The settlor identifies the purposes of the trust, such as asset protection, estate planning, philanthropy, or the management of complex assets.
Drafting the trust deed: Prepare the legal documents that outline the rules of the trust, along with the rights and obligations of the parties involved.
Transferring the assets: The settlor transfers the assets to the trustee, making them part of the trust.
Administration: The trustee manages the assets in the interest of the beneficiaries, following the established rules and applicable laws.

3. How does a trust operate?

The operation of a trust is based on three pillars:
A. Asset segregation:
The assets transferred into the trust are separated from the personal estate of the settlor and the trustee, ensuring protection from creditors and legal disputes.
B. Wealth management:
The trustee administers the trust assets, which may include investments, real estate, artwork, and other holdings. Decisions are made based on the terms of the trust deed.
C. Distribution to beneficiaries:
Designation of beneficiaries: Beneficiaries are named by the settlor in the trust deed, which specifies who will receive the assets or income and how.
Beneficiaries’ rights: Beneficiaries may have fixed rights (e.g., regular income) or depend on the trustee’s discretion (discretionary trusts).
Distribution process: The trustee transfers assets or income to the beneficiaries according to the trust’s rules. This process may include direct property transfers or periodic payments.

4. Advantages of a trust

Asset protection: Trust assets are safeguarded from legal and financial risks.
Estate planning: A trust ensures the orderly transfer of wealth across generations while respecting the settlor’s wishes.
Flexibility: The trust structure can be tailored to meet unique needs, such as protecting vulnerable individuals or administering international assets.
Confidentiality: The trust preserves the privacy of the settlor and beneficiaries, keeping financial information confidential.
Tax efficiency: A well-structured trust can provide significant tax advantages by optimizing succession and wealth management costs.

Entrusting your assets to a professional and regulated trustee, such as Swiss Capital Guard Trustee, ensures expert and compliant management, offering peace of mind and security in protecting your wealth.

Who is a trust suitable for?

A trust is a flexible and customizable solution, ideal for addressing a wide range of patrimonial and family needs. Here are the main profiles for whom a trust represents a suitable tool:

Families with significant wealth

Families with complex assets or those distributed across multiple jurisdictions.
Succession planning needs to ensure the continuity and protection of generational wealth.
Situations where it is necessary to preserve and transfer wealth while avoiding conflicts among heirs.

Entrepreneurs and family businesses

Entrepreneurs who want to ensure the continuity of the family business by protecting it from legal or economic risks.
Structuring corporate participations to simplify governance and ensure stability in case of succession.
Managing liquidity or capital resulting from the sale of a business.

Individuals with specific needs

Protecting vulnerable family members, such as minors, elderly individuals, or those with disabilities.
Addressing the need for protection against claims from third parties, such as creditors or marital disputes.

Clients with philanthropic goals

Families and individuals who wish to create trusts or foundations to support charitable projects or long-term philanthropic initiatives.
Structured solutions to ensure that donations are managed effectively and aligned with the settlor’s objectives.

International clients

Individuals with assets and beneficiaries located in multiple countries, requiring wealth management that complies with international regulations.
Situations demanding confidentiality and protection of wealth across multiple jurisdictions.

Investors and collectors

Owners of luxury assets such as artwork, yachts, real estate, and jewelry, who require dedicated solutions to preserve and enhance these assets.

Influencers, artists, and entertainment professionals

Managing and protecting income from sponsorships, copyrights, merchandising, and other creative activities.
Structuring wealth to optimize taxation and plan for the long term.
Protecting assets from legal, contractual, or reputational risks.
Planning to ensure the continuous and structured management of the personal brand or artistic activities in case of unforeseen events.