WHAT IS TRUST? (INTERNATIONAL LAW)

WHAT DO YOU UNDERSTAND BY TRUST?

The fiduciary relationship between three parties is known as trust. The trustor or settlor transfers property upon the second party, the trustee for the third party’s benefit, known as the beneficiary.

A testamentary trust arises after the settlor’s death and is created by a will. An inter vivas trust is created by a trust instrument during the settlor's lifetime. A trust may be irrevocable or revocable. A trust is presumably irrevocable unless the will or instrument making it states it to be revocable in the United States. In Oklahoma, California, and Texas, the trusts are revocable until the will creating says them to be irrevocable. A judicial proceeding can only revoke an irrevocable trust.

WHO IS A TRUSTEE?

The legal owner of the property in the trustee is the trustee who is the fiduciary for the beneficiaries who are the equal owners of the trust’s property. The legal owners have a fiduciary duty to manage the trust. They provide a regular accounting of the trust’s expenditures and income. Trustees are reimbursed and compensated for their expenses. A court can remove a trustee in case of breaching the fiduciary duty. Breaches of the fiduciary duty are charged and tried as a criminal offence in the court of law.

A trustee can be a business entity, or a natural person and can even be a public body. Trust is subjected to state or federal taxation.

A trust that a settlor creates transfers the property's title to a trustee, who holds the title of the transferred property in trust for the beneficiaries’ benefit. The terms govern the trust under which it was created. In most jurisdictions, the trust requires a contractual agreement or deed. A single individual can assume the role of one or more of these parties, and multiple individuals share a single role. In a living trust, the grantor is a trustee and a lifetime beneficiary.

CONCLUSION

An International Trust refers to retirement planning that includes estate planning. Integrating estate planning and asset protection covers the death and life side of planning and living for the future. An International Trust creates a greater level of confidentiality and privacy in handling personal assets and affairs; it shouldn’t be a means to evade taxes. The trust should not be used as a tool for fraudulent activities and purposes. The asset protection planning integrates different planning tools into one structure, thus creating a synergy beyond what can be accomplished with independent techniques of planning. An International Trust has different purposes, and one of them is asset protection.

Author: Ankita Agarwal