Reasons for using a Trust
Riverside Trustees Limited

Reasons for using a Trust

Preservation of Wealth

A trust is ideal for any individual who is keen to ensure that what value has been earned and accumulated endures to benefit future generations.  A settlor can lock up capital in a trust and specify which family members or other people should benefit from the income and capital and in what proportions in times to come.  Discretion can be given to the trustee to consider:


  • Young children who require provision for their maintenance and education.


  • Extravagant or profligate children who might otherwise fritter away capital given to them outright.


  • Naive members of the family who could be taken advantage of by others.


  • Members of the family with special needs such as mental or physical impairment.


  • Family matters which need to be provided for in a discreet and confidential manner.


  • Retired employees or servants and their dependants.


  • Philanthropy or charitable giving.

An Alternative to a Will

Dealing with Probate and administering an estate when someone dies can be a troublesome and often time-consuming task which can take years to complete and cause cash flow issues for the surviving dependants.  Assets owned by a trust are outside of the estate of the deceased and are therefore available for distribution immediately upon death and do not require the rigid formalities of Probate.  It is possible to settle assets on trust during lifetime with a suitable letter of wishes to the trustee to replace the Will with directions for distribution in the event of death.  An active or a standby trust can be useful as a replacement for a Will.


Rewriting Wills and drafting codicils can be time-consuming and rigid.  A discretionary trust requires only a fresh Letter of Wishes signed by the settlor with no need for witnesses as guidance to the trustee as to the administration of the trust fund.   

Fiscal Benefit

Trusts are generally able to mitigate the trust fund from onerous taxes that might otherwise be due or at the very least through deferral years into the future. Every country has its own tax rules, some more aggressive towards trusts than others, but trusts can offer particularly attractive fiscal benefits.


A trust is a private document between the settlor and the trustee and does not require registration or submission of the trust deed to any authority.  It is also possible to draft the trust deed without the names of the beneficiaries appearing on the deed itself, and to restrict who may be entitled to information relating to the trust other than the settlor.  It should be noted that due to international regulatory regimes such as the Common Reporting Standard (“CRS”) and the USA’s Foreign Account Tax Compliance Act (“FATCA”), a trustee has certain governmental reporting obligations to ensure compliance with international taxation laws.


Because the assets of a trust are owned by the trustees independently of the settlor or beneficiaries, it is generally not possible to enforce repatriation procedures against the trustees (although if the assets in question are held in the enforcing jurisdiction it is sometimes difficult in practice to prevent such repatriation).

Asset Protection

If a trust is set up specifically for the purpose of avoiding creditors illegally, it would be justifiable to overturn the trust and seize the assets for the creditors. However, if the trust is established for legitimate purposes such as tax planning or estate and succession planning, it would likely provide protection in the event of subsequent bankruptcy by the settlor.  Similar protection may also be available in divorce situations.