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Saving and Investing 11 June 2021

Leave nothing to chance: the right Trustees are central to generational wealth

With a multitude of considerations when setting up a family trust, learn how to tick the right boxes.

Setting up a family trust is a popular and practical vehicle to preserve family wealth and create a long-lasting legacy.

To do so successfully demands a great deal more than many realise. This is especially true of the regulatory demands placed on families who are considering their long-term future.

It makes sense therefore to approach this with caution and a carefully-considered plan of action.

Understanding the legal requirements

Before setting down this road, it’s important to be aware of the legal framework that surrounds the creation and management of a trust.

First among these are “three certainties”; requirements which must be present for a trust to be valid. These are certainty of intention, subject matter and object.

This means there must be a clear intention to create a family trust, clarity of the assets contained in the trust, and who the trust beneficiaries are.

While these may appear fairly simple requirements to meet, the most effective trusts are managed by professional trustees who are familiar with all applicable laws and make sure they remain compliant at all times.

The role of trustees

Trustees are central to the effective management of the trust, while ensuring it reflects the evolving needs of the family.

This long-term commitment is crucial if the original intention of preserving wealth through proper succession planning is to be realised. This role takes on greater significance if this plan includes vesting family business shares in the trust.

It pays to use professional trustees

One of the biggest threats to your family trust is a trustee who is non-compliant with the applicable regulations.  

 Given the level of scrutiny placed by financial services regulators, trust companies need to ensure that they abide to strict guidelines failing which they can be subject to regulatory sanctions ranging from penalties to license revocation.

Given the risk of non-compliance, it makes sense to appoint a professional trustee able to effectively manage, preserve and enhance the family trust.

These responsibilities include the fiduciary duty to act in the best interest of beneficiaries and ensuring that all regulatory requirements are being met.

These are specialist skills often possessed only by professionals who are suitably qualified and accredited.

Choose the right jurisdiction

Having found the right trustees, you can now consult on the most appropriate location for establishing your family trust.

This has far-reaching implications because of the regulatory framework in different jurisdictions, and will determine how the trustees manage the trust’s assets.

For this reason, trustees need to be familiar with and accredited to manage these structures within your chosen jurisdiction. Many of the recognised financial destinations also possess a pool of professionals able to handle all aspects of family governance, trust law, estates and wealth management.

Another advantage of selecting a credible jurisdiction is that many related professional services are within easy reach.

Governing trust law

A consequence of your chosen jurisdiction is how trust law is applied there. This will dictate the structure and terms within which the trust is managed, which will directly influence the relationship with beneficiaries.

Choosing a tried and tested trust law helps to increase certainty and predictability for family members.

A trusted partner

Standard Bank’s trust services aim to remove the complexities of setting up a trust and ensure you remain compliant at all times.

With offices in Jersey and Mauritius, our Trust Business is well-versed in the ever-changing regulatory landscape and applicable trust laws. This ensures that your trust fund is safeguarded and fulfils its intended purpose over the longer term.

Our team of experts are at hand to help set up a trust and ensure that you meet the necessary compliance measures. Speak to your relationship manager for more guidance.

IMPORTANT INFORMATION

This document has been prepared for the assistance of clients considering creating a trust (in either Jersey or Mauritius).  It is intended to provide a quick overview to the establishment and administration of offshore trusts and the benefits of estate and succession planning with family businesses in mind. It is not intended to be comprehensive in its scope and it is highly recommended that a client obtain both legal / tax advice (as may be appropriate) prior to the establishment of a trust and with any proposed transfer of assets.

These services are provided by Standard Bank Offshore Limited’s subsidiaries in Jersey and Mauritius.

Standard Bank Offshore Trust Company Jersey Limited is regulated by the Jersey Financial Services Commission. Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ. Registered in Jersey No 9153. Where Standard Bank Offshore Trust Company Jersey Limited makes a statement or incurs a liability in its capacity as trustee of a particular trust, it does so only as trustee of that trust, and not otherwise. 

Standard Bank Trust Company (Mauritius) Limited is regulated by the Financial Services Commission, Mauritius, to provide corporate and trust services and does not fall under the regulatory and supervisory purview of the Bank of Mauritius.  Where Standard Bank Trust Company (Mauritius) Limited makes a statement or incurs a liability in its capacity as trustee of a particular trust, it does so only as trustee of that trust, and not otherwise. Registered office address is Level 9, Tower B, 1 Cyber City, Ebene, 72201, Mauritius and business registration number: C06021609

The above entities are wholly owned subsidiaries of Standard Bank Offshore Group Limited whose registered office is Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ. Standard Bank Offshore Group Limited is a wholly owned subsidiary of Standard Bank Group Limited which has its registered office at 9th Floor, Standard Bank Centre, 5 Simmonds Street, Johannesburg 2001, Republic of South Africa.  The Standard Bank of South Africa Limited (‘’Standard Bank’’), an authorised Financial Services Provider (FSP number 11287).

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