A Seychelles trust is an important legal arrangement that allows for the management and distribution of assets.
In simple terms, it involves transferring ownership of certain assets (such as property, shares, or cash) from one person to another, to benefit a third party or group of people.
Key Participants in a Trust:
1. Settlor (UK, Seychelles, Commonwealth Countries and most of the World) / Grantor (US): The person who establishes the trust by contributing assets. Also known as the “trustor” or “creator.”
2. Trustees: They are organizations (trust companies) such as A.C.T., individuals, or a small group responsible for managing and safeguarding the trust assets. They are the legal owners of the assets within the trust. They must act in the best interests of the beneficiaries.
3. Beneficiary: The person or group entitled to benefit from the trust. They may receives distributions from the trust fund from time to time.
Trust Structure:
Trust Deed:
• A written document that outlines the terms of the trust.
• Specifies how the assets should be managed and distributed.
Trust Fund:
• The collection of assets held within the trust.
• Not owned by the trust itself; instead, the trustees hold legal ownership.
• The trust fund exists solely for the benefit of the beneficiaries.
Key Distinction: Legal vs. Beneficial Ownership:
• Unlike a company, a trust does not directly own assets. Legal Ownership belongs to the trustees. The trustees hold title to the assets.
• Beneficial Ownership belongs to the beneficiaries. Trustees manage the assets on their behalf. Trustees prioritize the beneficiaries’ interests over their own.
Types of Trusts:
1. Lifetime Settlement:
• Takes effect during the settlor’s lifetime.
• Assets are placed in the trust for ongoing management.
2. Will Trust:
• Activated shortly after the settlor’s death.
• Assets are distributed according to the terms specified in the will.
3. Various Forms:
• Trusts can vary based on distribution rules, purposes, and beneficiaries.
• Regardless of the specific type, the core principle remains consistent: a trust holds assets for the benefit of others.
In summary, Seychelles trusts serve as great tools for managing assets, ensuring their proper use, and benefiting designated organizations, individuals, or groups.
Our team at A.C.T. in Seychelles can help you quickly and cost-effectively establish and register a Seychelles trust, and properly setup and manage the roles of settlors, trustees, and beneficiaries, to ensure you have an effective Seychelles Trust.