Trusts
Originally trusts were established to protect the wealth of individuals and family groups, and this is still the case today. A trust is created when a person (the settlor) transfers ownership of assets to a third party (the trustee) to be administered on behalf of the beneficiaries (i.e. those people who enjoy the benefit of the assets). A trust distinguishes between the legal ownership (the trustee) and the beneficial ownership (the beneficiaries) of assets. Trusts hold assets for the trustee or for the benefit of others. Assets inside a trust are managed by a trustee who has legal responsibility for managing and overseeing trust proceeds in accordance with the settlor's wishes. The trust stipulates how the assets should be managed, and how, when and to whom these assets will be distributed.Typically, a Trust company acts as trustee of the trusts which it administers. Because the original owner (the settlor) no longer has ownership of the assets, several important advantages can occur, such as enhanced capital and inheritance tax planning opportunities, asset protection and confidentiality.
A trust company is a separate legal entity organized to perform the fiduciary functions of trusts and agencies. It is normally owned by one of three types of structures: an independent partnership, a bank or a law firm, each of which specializes in being a trustee of various kinds of trusts and in managing estates. It can be beneficial for the shares in a company to be held in Trust thus ensuring owners and beneficiaries of such structures can enjoy the advantages listed above. When highly appreciated assets are sold, a large chunk of the gain may go to taxes. A trust can also shelter property from taxes on income and capital gain and thus avoid the tax bite.
What Can Go into Trusts?
* Stocks and bonds
* Real estate
* Mutual funds
* Variable annuities
* Capital management accounts
* Life Insurance
* Art
* Collectibles
* Personal possessions; and more
A trustee will manage investments, keep records, manage assets and prepare court accountings, paying bills and (depending on the nature of the trust) medical expenses, charitable gifts, inheritances or other distributions of income and principal.
Careers & Education in the Trust Profession:
STEP (the Society of Trust and Estate Practitioners) was founded by George Tasker in 1991 and is the international professional body for workers in the trust industry and the (often overlapping) field of estate administration. Its members are mainly solicitors, barristers, attorneys, accountants, trust officers and trust administrators as well as banking and insurance professionals in the trust field. STEP has branches in 33 countries with a current membership in excess of 13,000. The designation TEP after a member's name is the most widely recognised mark for professionals in the trust and estate administration industry. It is also common for Trust professionals to hold either the ACIB (Associate of of the Chartered Institute of Bankers) or ICSA (Institute of Chartered Secretaries and Administrators) designation.
Trust Officers
Trust officers manage a variety of assets that are placed in trust within a Trust Company. Trust Officers are typically STEP qualified professionals or Accountants or Lawyers with experience in personal or corporate trusts and privately held companies. The responsibilities of a Trust officer would typically include the administration of trust and company accounts in accordance with the terms of the governing document, the management of investment holding/trading companies, the management of cash and other assets and the review of the Annual Trust and Managed Company Accounts.
Trust Administrators:
Trust administrators are responsible for supporting the Trust Officer in the administration of a portfolio of complex unit trust and private client trusts; reviewing and coordinating documentation for trust and corporate clients and liaising with lawyers, accountants, other professional advisors and regulatory bodies in the day to day administration of trust clients. A Trust administrator would typically be studying for a full STEP qualification, or similar.
Trust Accountants:
Trust accountants are typically fully qualified professional accountants who prepare financial statements, net asset valuations, analyse financial data and prepare other financial information as required for a variety of structures including private and institutional trusts, licensed trust companies, SPVs and other investment holding vehicles, on a monthly, quarterly and annual basis.
