When forming a trust it is relevant to understand the history so as to choose the correct jurisdiction and type of trust for your structure. For a trust to exist there are three requirements, all of which must be satisfied: There must be a Settlor, being a person wishing to confer a benefit on others, the exact nature of this benefit will be set out in the trust, here must be a Trustee and the assets, which will be used to provide the above benefit, must be transferred under the control of the trustee. Trust assets must be segregated from those of the trustee and cash, for example, will be deposited in an offshore banking account, There must be beneficiaries. If more than one it must be possible to ascertain at any time who these persons may be and when they will receive their benefits. Although the original purpose of the formation of a trust may have been, generally speaking, estate planning, permitting assets to be held for the benefit of persons who were not themselves capable of managing assets and enabling a simple transfer to successors, trusts have in more recent times also become instruments of tax planning. The ability to separate the legal and beneficial interests in property and the rights to income from the rights to the capital has assisted in the growth of the entire financial planning industry. The Foundation is probably best viewed as the civil law alternative to the trust. It is created by a founder who transfers assets to the Foundation Council, or Board, to be administered for the benefit of, and ultimately distributed to, the beneficiaries of the Foundation in accordance with the constitution. It can be used for the same purposes as a trust. Once the Foundation is established it constitutes a separate legal estate from that of the Founder and its assets are protected from future claims against him. Whilst the assets are retained within the Foundation they can be protected also from claims, which may be made against the beneficiaries. Total exemption of taxes including income tax, wealth tax, real estate tax, inheritance tax, sales and transfer tax and others, in some jurisdictions.
