III. Trusts and Managed Companies

Q. How do I decide whether I need a trust or managed company?
Generally this decision is dependent on the client circumstances, and would be made in consultation with a client's lawyers and/or accountants. Trusts are mostly used in circumstances where a client wishes to transfer legal control of their assets; for example, asset protection structures or to ensure the effective intergenerational transfer of their wealth to their chosen heirs. Companies are used in a wide range of circumstances but generally to consolidate personal assets or for international business transactions. Many structures involve both a trust and a company.

Q. Does the Bank set up trusts and managed companies?
Yes, our in-house Trusts Division, which is managed by attorneys, is able to set up trusts and incorporate companies. We are also willing to act as Trustee for the trusts or nominee shareholders and directors for the companies. Generally in more complex structures, we utilize external legal counsel to ensure the effectiveness of the structure in achieving the client's objective. We incorporate offshore companies in conjunction with a major accounting firm, generally at no additional cost and without the client having to be involved.

Q. How do I ensure that assets which I settle into a trust will be properly managed by the Trustee?
A properly worded trust deed will set out the powers, duties, and responsibilities of a Trustee, which if not followed will place a Trustee under significant liability to the Settlor and beneficiaries of a trust. Most Trustees have insurance to cover these potential liabilities and some of the established Trustees will have a significant amount of capital at risk to ensure proper performance. The Bank has both insurance and a substantial equity base. In addition the Barbados Trust law places onerous responsibilities on a Trustee of a Barbados International Trust. One can also make use of a Protector to oversee the actions of a Trustee and who will be empowered to intervene in a transaction if needed. Ultimately, a Settlor should satisfy themselves that a Trustee has the competence and reliability to properly manage trust assets.

Q. Do I lose control over my assets which are settled into a Trust?
Most modern offshore trust deeds are worded so that the Trustee is not able to exercise control over the assets which are settled into a trust. A Protector appointed by the Settlor (as described above) to oversee the actions of a Trustee provides a mechanism for a Settlor to exercise some control. It is generally accepted that Trustees, in managing trust assets, will be guided by a letter of wishes from the Settlor. Most trust deeds also provide for a Trustee to be replaced by a Settlor or Protector, which provides an added measure of control.