Concept
A trust is neither a company nor a contract in the usual sense, but a legal relationship in which ownership is split. The settlor transfers assets to a trustee, who legally owns them but is obliged to manage them in the interests of the beneficiaries.
🍓 In a trust, the settlor transfers assets to the trustee, who legally owns and manages them for the benefit of the beneficiaries; the protector supervises the trustee. The separation of ownership and benefit is the essence of the structure.
Four Roles
Settlor
The person who creates the trust and funds it with assets. After the transfer, they typically cease to be the owner—that is the whole point; excessive settlor control over the trust renders it a "sham" and destroys the protection.
Trustee
The legal owner of the assets, bound by fiduciary duties: to act in good faith, in the interests of the beneficiaries, and to avoid conflicts of interest. Usually a professional trust company in a reliable jurisdiction.
Beneficiaries
Those for whose benefit the trust exists. Their rights depend on the type of trust: in a discretionary trust, a beneficiary has only an "expectation," and the trustee decides; in a fixed trust, they have a predetermined share.
Protector
An optional but common figure: a trusted person who supervises the trustee and may, for example, replace them or veto decisions. The protector balances the trustee's independence with the family's interests.
⚙️ A letter of wishes is a non-binding but key document: it allows the settlor to informally guide the trustee without becoming a shadow controller.
Why It Is Needed
🔗 Related
Recognition of Foreign Trusts · Types of Trusts · Trustee and Protector · Asset Protection Trusts · Private Foundations
The separation of ownership and benefit solves three problems: continuity (assets outlive the settlor), protection (they are no longer their direct property), and management (a professional trustee instead of chaos among heirs).
💡 Where trusts are not recognized, foundations play their role—see Recognition of Foreign Trusts.
This material is for informational purposes only and does not constitute individual legal advice.