Trust me

In the last series of posts I highlighted how feeling "too" safe might be deleterious in the (not so) distant future, if you hit a school bus with your car no insurance company will cover the amount of damages, if the IRS or Italian GdF make a random search (with parameters) they will find your name popping up very easily (international databases are now shared and searchable without request by certain institutions) I also introduced the Trust which have existed since Roman times and have become one of the most important innovations in property law.


So what is a Trust, what are the major benefits and how do you get one?

A Trust is an arrangement whereby a property (of any kind) is held by a nominee for the benefit of another. In the past they were formed by a notary office (they still are but with some additions), and the Trustees would have to be provided by the client which ended up in the formers always being people closely connected with the latter.

Nowadays though, to aid confidentiality, it`s big corporations that act as Trustees (or nominee if you wish), so whereby trustees indicated in the old fashioned way were connected to a single settlor/beneficiary (if your brother is a trustee, the number of people he can be the trustee of is rather limited wouldn`t you agree?), that connection is no longer there nowadays as the same corporation act as trustee for thousands of people.

The client as said before can be both the settlor and beneficiary, but his name will not be on any public record or data base, nor any property that is settled inside the Trust, this way not only you can dispose of things in all privacy, you can also rest assured that no claim can be made against them.

If you lend your car to aunt Betty and she crashes into a school bus, the only things that are liable are the crashed car and poor aunt Betty (supposing she is still alive).

If your ex employee wants 160 million dollars in damages (like Ellen Pao) and the judge rules in his/her favor going after your properties, he will probably have to do with that same crashed car. If some organization does a data base search you won't be in it.

As a Trust is not made public, upon your death, your estate will be distributed in private. A will, on the other hand, is public record and all transactions will be public as well. There will be death/inheritance taxes and probation (none of that with a Trust, your heirs get everything immediately and you can even decide how and when they get it).

You can set a trust in a couple of weeks with the help of a financial adviser.

At this point you must probably be thinking "It sounds all fine and dandy but how much does it cost?"
In certain circumstances it could even be free of charge, and if you want to do it with a major corporation, you could set it up for just GBP 299 (includes Trust Deed, Due Diligence and Formation) and then pay less then a coffee a day to keep it running, what it saves you in the form of tax efficiency (let me know if you want to know more on this) and liabilities avoidance, is worth thousands of times more.

If you don`t have a Trust your actual position is similar to a sitting duck, where the hunters are all the calamities out there aiming at you right now or in the future (you know how lazy hunters are, if your the only sitting duck in their pond guess who are they gonna shoot at...?).

Better put your self in a safer position, no matter who you do it with, you are going to thank me later...