Formation of a trust provides a number of advantages for managing estate and wealth of a private person or corporate entity. A trust is a structure within which a property is managed by one person or entity on behalf of another one. Every trust has a settlor, trustee and beneficiary. A settlor creates a trust and gives rights to someone else to manage its estate. A trustee is a person or a company which is in charge of managing someone’s property and wealth. A beneficiary is a beneficial owner of a trust, who gets proceeds from a trust management. A trustee is appointed to execute its duties on a fiduciary basis.

Trusts are administered in correspondence with the existing trust law and a trust deed – a document which is created for each trust individually to represent the aims and terms of that particular trust. It includes a period of a trust duration and describes duties and rights of the parties involved in it.

Often offshore jurisdictions are chosen for creating a trust, as they provide substantial tax advantages. Usually licensed trust companies with good international reputation are chosen as trustees. An offshore company is often appointed to be a beneficiary of a trust for protecting privacy and tax optimization purposes. A trust must be created professionally and correctly, in order to ensure security and good management of one’s estate and wealth.

It is advised to choose a trust company rather than an individual in a role of a trustee for the following reasons:

• A trust company must have a trust license, which is a proof of its knowledge, skills and integrity;
• A trust company is able to ensure continuity of a trust under different circumstances;
• A trust company employs a number of individuals, who can provide diverse and professional advice for managing trust estate in the most appropriate way in different circumstances;
• A trust company must have all the necessary equipment, internal procedures and controls for ensuring the most effective management of a trust.

Trusts are often created by parents for their children, in order to manage family wealth in the most cost effective and professional way. In addition, trusts are used for non-profit and charitable purposes.