Trust and foundations are the most efficient and effective ways to protect your assets and determine who to transfer your assets to and how much, via inheritance or not.

Here are the main aspects of difference between a Foundation and a Trust-

• A foundation is an independent legal entity that shares characteristics with both a corporation and a trust. It is based on civil law. The foundation, like a trust, provides excellent asset protection because legal ownership of assets is transferred to the foundation and can be used for efficient estate planning. There are no shareholders in the foundation; instead, there is a management body (the Council). While, A trust is a legal obligation or relationship that exists between the settlor (the person who establishes the trust), the trustee (the person in charge of the trust), and the beneficiary (the person who receives benefits from the trust).

• There are three main forms of foundations:

• Charitable foundations: set up for the sole benefit of approved charitable causes or charitable organisations. 
• Private foundations: also called Private Interest Foundations, they are used for succession planning in place of a will and for personal asset protection.
• Corporate foundations: used by corporations to manage employee-based schemes (pension plans, retirement plans).

The most common types of trusts are the following:

• Discretionary trust: a trust in which the settlor has given the trustee full discretion to decide which (and when) members of a defined group of beneficiaries are to receive either the income or the capital of the trust.
• Charitable trust: a trust created for charitable purposes only, e.g. for the advancement of education, promotion of public health and comfort etc

• As a legal body, Foundations can be sued or can sue, enter into contracts and agreements with companies or persons, open bank accounts and conduct commercial activities. It holds the legal and beneficial titles to all assets held in the foundation. While, a trust is not a legal entity in its own right. Therefore, the trust cannot be sued or take legal action as a corporation or a foundation can. Legal ownership of the trust sits with the trustees and beneficial ownership with the beneficiaries.

• While a foundation is managed by a Council made up of one or more persons; corporate bodies are permitted; The trust may have a protector, but the trustee has overall charge of the assets as defined by the trust deed.

We enable our clients to pass on the benefits of their assets in full accordance with their wishes, regardless of the complexity of a foundation\’s structure, to ensure their legacy is preserved in compliance with all legal and regulatory requirements.