Tools like trusts and foundations work best when they solve governance problems; tax efficiency then follows.
Why families adopt them. Succession, creditor protection, and stewardship. The right tool depends on where the family lives and where assets sit.
Trust basics. Settlors, trustees, protectors, and beneficiaries. Letter of wishes sets direction; professional trustees bring process and continuity.
Foundations. A foundation is a separate legal person with a council/board. Useful when civil-law familiarity is desired or when perpetual purpose matters.
Tax posture. Look through vs separate taxpayer treatment varies by jurisdiction. Anti-avoidance rules, CFC look-through, and attribution can apply.
Practical build. Inventory assets, choose governing law, pick a trustee/foundation council with the right license, open custody and cash accounts, and define distribution policy.
Ongoing life. Minutes, investment mandates, risk limits, and audits.
FAQ:
- Can a trust “hide” assets from CRS? No; trusts are squarely in scope.
- Which is cheaper—trust or foundation? Cost is secondary to fit; governance first. Editor’s Note: A structure you can’t run in year three wasn’t designed properly in week one. Tags: Trusts, Foundations, Succession, Governance