1. To preserve family wealth through succession planning
Trusts are an extremely effective structure to use when dealing with family assets and the rights of individual family members over those assets. A trust protects against wealth fragmentation, which often occurs after immediate distribution to heirs upon death. The distribution intervals of a trust to the beneficiaries can be stipulated and placed under the trustee's control in order to best look after the interest of the beneficiaries.
2. To provide asset and creditor protection
Trusts can reduce tax liabilities, and protect assets from future creditors or certain civil suits to the extent permitted by law. In the event that new unfavourable legislation is implemented, trusts can help insulate one's assets from being seized or blocked.
3. To allow continued control over business assets
Trusts when set up in well-regulated jurisdictions can offer continued control over business, without sacrificing the benefits of protection and confidentiality. A good example is the VISTA trust, available in the British Virgin Islands, which makes special provision for trusts of shares in companies and for related matters and relieving trustees from the management of the company except in certain circumstances. Another special trust structure is the Private Trust Company (PTC), which is a company formed for the specific purpose of acting as trustee of a single trust, or a group of related trusts.
