Understanding Trusts and Companies
Corporate structures play a pivotal role in wealth management, with trusts and companies being the most prevalent forms used for asset-centralization and legal segregation from an individual. A company, as a simpler option, allows the investor to maintain roles such as shareholder or director, operating with its own legal identity, which can contract and incur liabilities independently. However, compared to a trust, a company offers limited benefits in estate and succession planning.
On the other hand, a trust offers a more sophisticated solution geared towards long-term estate and succession planning. Once assets are transferred to a trust, the investor, typically the settlor, may have less control but can specify beneficiaries, including themselves, and reserve certain powers like investment decisions. Trusts are particularly beneficial for equal distribution among children and can safeguard specific dependents by restricting benefits to certain purposes only.
Asset Considerations
Generally, both trusts and companies can hold any asset or liability including assets such as real estate, art, private equity, listed investments, financial instruments, and intellectual property. However, certain jurisdictions may offer favorable conditions or requirements for specific assets.
Onshore vs. Offshore Structures
To maximize efficiency and benefit from the most suitable structures, investors often segregate assets by region, distinguishing between GCC (onshore) and international (offshore) assets. While The Family Office does not provide legal or tax structuring advice, we facilitate the formation of necessary structures and can coordinate the provision of specialized third-party advice as part of our comprehensive wealth management services.
Potential Benefits of Structured Investing
Investing through a structured approach offers several advantages:
Asset Consolidation: Streamlining asset management and administration.
Estate Planning: Enabling desired distribution proportions to chosen beneficiaries for specified reasons.
Legal Segregation: Enhancing confidentiality and protecting the investor’s assets in the event of legal challenges.
Wealth Preservation and Growth: Safeguarding and augmenting family wealth over time.
Supporting Structured Wealth Management
While The Family Office does not directly advise on the creation of structures, we recognize their importance for certain families and support a holistic approach to wealth management and long-term investment strategies. For clients with existing structures, we recommend periodic 'health-checks' to ensure that they continue to meet evolving obligations and intentions. The Family Office is equipped to facilitate these reviews, ensuring that your wealth management strategy remains robust and responsive to your needs.