Trusts: Pandemic to pent-up prosperity

July 22, 2021

After almost eighteen months of living through a global pandemic and a huge slump in economic growth, we seem to be seeing some light at the end of the tunnel.

One unforeseen consequence of all the lockdowns is that as individuals, personal wealth and savings seem to have accumulated more than in usual years. Now we appear to be getting back to a ‘new
normal’, they also seem keen to spend it.

As a result, Investment in property and assets has been substantial. The housing market looks set to rise again and could bring about an economic revival. The lack of supply for asset classes in general
but the demand for property in particular, matched with higher levels of disposal income and savings mean we could see a huge increase in asset prices and a boom time for those already on the
property ladder.

But how do investors safeguard these newly purchased assets and ensure they are protected for future beneficiaries?

Trusts offer protection and security for your wealth. The settlor, the founder of the trust transfers assets to his professional trustee in favour of the chosen beneficiaries, secure in the knowledge that
these assets will be administered and ultimately distributed as he intends.

Interestingly at its most basic a trust can be as simple as just a verbal agreement, but this gives rise to inevitable problems of proof of title and intention. Therefore, most trusts will be formed by a
‘Trust Deed’ which sets out all the power and responsibilities of the trustee’s but also who the beneficiaries are.

One key advantage of this alienation of assets is that by giving control and actual legal ownership of your assets to your trustee, you can protect the assets from seizure or attack by third parties.
Another is the ability to use a trust to provide for, in some cases, multiple generations of beneficiaries. Trusts allow settlors to influence the destiny of their assets well beyond their death
and ensure adequate provision is made for their families and descendants.

In Gibraltar, these sound reasons are also supported by favourable tax and legal backdrop.

Trusts can be set up to manage all types of assets. Our trust managers at Abacus can advise you on all your options and the most suitable path for you to take as the settlor.

Written by Abacus

Please contact our Trusts Director Paula Bullock at paula.bullock@abacus.gi for further information and advice on setting up a trust with Abacus.