a) to reduce substantially or eliminate death duties in respect of the settlor's assets;
b) to the extent permitted by law and public policy to protect assets against attacks by future, unknown creditors;
c) to protect family assets from the extravagance or bankruptcy of a beneficiary (protective trusts);
d) to make provision for someone under a legal disability (e.g. minority);
e) to lessen or eliminate probate formalities on the death of the settlor, while distributing assets in accordance with the settlor's wishes;
f) to set aside both legally and physically, assets to be used in a flexible way in the future, thus as a financial planning tool for a family;
g) to ensure the continuity of a family business;
h) to provide for charitable institutions and for benevolent but non-charitable purposes (purpose trusts);
i) in the context of commercial transactions where it is useful to separate legal and beneficial ownership or to take transactions off balance sheets;
j) to avoid forced inheritance laws, thereby to maintain freedom to dispose of assets in a manner deemed desirable by the settlor rather than by legislators in the domestic domicile or place of residence;
k) as a will-substitute, or supplement;
l) to function as trading trusts and voting trusts;
m) to hold benefits under annuities and life insurance policies;
n) to segregate risk, insulate assets and reassure financiers in commercial and individual loan structures;
o) to protect assets from political, regulatory, exchange control or economic risk at home or abroad;
p) to enable a family or business to conduct both domestic and international transactions in a cost-effective manner and with enhanced efficiency, privacy and flexibility;
q) in specialised investment applications:
- Unit Trusts
- Pension Trust Funds
- Trusts For Debenture Holders
- Securitisations
- Project Financing
r) in Accident and General insurance applications;
s) in specific applications (e.g. restorative funds in mining operations);
t) to protect a reasonable level of assets from unreasonable awards. Debtors of course should repay creditors in full, rather than a portion of the debt minimised by sharp practice. Legitimate "Asset Protection" features are provided under Bermuda law, which will render the trust property more secure in proper circumstances. However, protection from creditors should never be the sole motive in establishing an offshore trust in any jurisdiction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.
