Trusts and Funds
Everyone who has achieved success has the right to protect the results of their efforts.
Private funds and trusts have been the most reliable means of property and assets protection for centuries. These tools have a lot in common – they can exist almost forever, reliably protecting your assets by rejecting any other rights to their ownership. However there are numerous differences between them:
A trust is a product of the common law, while a fund is related to the civil law. For example, the 1985 Hague Trust Convention has not yet been ratified in Russia, so the law does not understand the essence of a trust structure where one agent owns an asset, while the other one receives its benefits. Nevertheless, trusts remain attractive; however they require proper approach to be able to use their inherent advantages.
- A trust can be moved to another
jurisdiction at any time (most offshore territories do not prohibit trust
migration). The incorporator or protector can change the country of residence. In
the meantime, the fund itself will operate within the framework of the chosen
jurisdiction’s legislation.
- Unlike a trust, a fund is a fully valid
legal entity governed by the articles of incorporation and the rules of
procedure. The roles of the board, company officers, manager and secretary are
clearly laid out in the above documents. The rules for the functioning of the
trust are fixed only in the trust agreement and are little regulated by the
general law. However, a trust agreement is signed with a legal entity (a trustee, which is an authorized trust administration
company), so these relations by no means can be described as free.
- Compared to a trust, a fund is a
relatively new legal form. Trusts have been part of the English precedent law for
centuries, and there are more than enough precedents related to them, which
makes potential court rulings more predictable.
- The amount of control that an incorporator
has over a fund’s operation is also potentially higher than with a trust: funds
have a specific objective for their incorporation that is indicated in the
documents, and the law prevents major potential misuse, while trusts have
authorities limited only by a trust agreement. This is exactly the reason why
the text of a trust agreement is of paramount importance.
Most importantly, what makes trusts and funds both similar and attractive is that they both offer absolute protection of your assets. Moreover, this protection is equally reliable both in situations caused by political or competitive risks and in cases of property disputes with relatives, since financial claims of spouses in divorce or heirs unhappy with the will cannot be applied to the property that does not belong to you.
Every day, the Emerald Consult team successfully develops and implements asset protection programs using opportunities presented by international trusts and funds.
Entities that we created guarantee not just the complete security of your assets, but also the highest possible confidentiality.