Trusts

Malta makes an attractive location for the establishment of trusts, thanks to its cutting edge Trust law and high professional standards. In terms of Maltese law, according to Article 3 of the Trust and Trustees Act, Chapter 331 of the laws of Malta, a Trust exists where a person or persons (the trustee) holds, as owner, or has vested in them property under an obligation to deal with that property for the benefit of persons (the beneficiaries) whether or not yet ascertained or in existence, or for a charitable purpose.

As a professional trustee, Atom Trustees Ltd (ATOM) is authorised by the Malta Financial Services Authority (MFSA) to act as trustee. ATOM adheres to the standards required under the Trusts and Trustees Act, other related legislation, as well as to best practice within the industry. The MFSA has also issued a code of conduct providing guidance to trustees, which ATOM has adhered to. ATOM is committed to exercising its fiduciary duties prudently and competently, subject to the provisions of the Trusts and Trustees Act and the terms of the Trust instrument. ATOM will consider the rights of the settlor and all beneficiaries when making decisions affecting the administration of the Trust.

THE SETTLOR

The Settlor is the person who sets up the Trust. The Settlor must be of age, have full capacity to contract and a free disposition of the assets settled on Trust. A Settlor may also be a Beneficiary under the same Trust. By virtue of a Letter of Wishes, the Settlor expresses to ATOM the manner in which ATOM should exercise discretion. Depending on the relationship between the Settlor and the Beneficiaries, the Settlor may opt to inform the beneficiaries of this Letter. The Settlor may also choose not to disclose this Letter to the Beneficiaries. A Letter of Wishes is not legally binding on ATOM but constitutes general guidance on the Settlor’s wishes.

THE BENEFICIARY

The Beneficiary is the person who may benefit from the assets of the Trust. All Beneficiaries have to be mentioned by name or are ascertainable by class or by relationship to a person, whether alive or dead. This means that even children not yet born or conceived may be potential Beneficiaries. The rights of a Beneficiary are personal to him/her. The terms of the Trust may provide for the addition of Contingent Beneficiaries or the exclusion of a Beneficiary from benefit.

LEGAL EFFECTS

The holding of your assets by ATOM under Trust has the following legal effects:

• The assets constitute a separate fund and are not a part of ATOM’s own estate. Therefore, as trustee, ATOM will own your assets as a separate patrimony or fund. Although ATOM must maintain them, pay for their upkeep, maximize income and minimize risk, should ATOM become insolvent, the Trust assets cannot be seized to defray ATOM’s personal liabilities. The Trust assets are preserved for the benefit of the Beneficiaries;
• Title to the Trust assets stands in the name of ATOM or in the name of another person on behalf of ATOM;
• ATOM has the power and the duty, in respect of which it is accountable, to manage, employ or dispose of the assets in accordance with the terms of the Trust and the special duties imposed upon ATOM by law.

BENEFITS OF A MALTA TRUST

• Malta offers lower set-up and administrative costs
• Malta has over 60 double taxation treaties
• Possibility of imposing conditions on distribution of assets following the demise of the settlor
• Efficient distribution of assets
• Protection of assets from claims and creditor
• Tax planning opportunities
• High professional standards

USES

Many Trust arrangements are broadly similar although each is tailored to the individual requirements of the settlor and beneficiaries. There are various types of trusts, the choice of which will depend upon the circumstances of the settlor and the manner in which it is intended to provide for the beneficiaries.

Malta caters for all the main types of trusts, while also permitting the establishment of a Collective Investment Scheme and Pensions Schemes via Trust.

CREATION

With the exception of unit trusts, which must be created by a written instrument, a Trust can be created in any way, whether this is done unilaterally, by an oral declaration, by an instrument in writing, by a testament/will, by operation of law or by a decision of the Court.

DURATION

Except for unit trusts, trusts set up for a charitable purpose or trusts set up as retirement funds, trusts come to an end upon the expiration of 125 years from their creation, unless they have been terminated or revoked before such date.

THE OFFICE OF THE “PROTECTOR”

For assurance that the Trust is being managed by the trustee in accordance with the Trust Deed and/or Letter of Wishes, the Trust may also provide for the office of a protector, the role of whom is to act as a supervisor over the trustee.