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Jersey has been a prominent player in the field of administering trusts since the 1960s. In addition, the foundation brought into force by the States of Jersey during July 2009 is an important new type of legal entity that is a hybrid of a trust and a company. The foundation is a flexible alternative to the traditional common law trust for tax and succession planning. So what does this mean in practice? The foundation is particularly appealing to those from civil law jurisdictions which have forced heirship provisions in their succession legislation.
There are many other similarities and differences that will define which one is best for you.
The foundation is a flexible alternative to the traditional common law trust for tax and succession planning.
While the foundation is a rival concept to the trust, and has many advantages, it is a fact that the trust concept will continue to be widely used in international tax and wealth planning for two reasons.
A well-known problem confronting would-be settlors of trusts is that they must transfer ownership and control of their valuable assets to third party professional trustees who they may not know well.
The private family trust company (PTC) is a good way to address this problem. A PTC in Jersey will act as a trustee to a family trust/trusts and the composition of the board will often be influenced by the needs of the family, so may include certain family members and trusted advisers. Underlying the trust, the structure will be designed to suit best the various tax, legal and family considerations.
PTCs in Jersey do not need to be licensed with the Jersey Financial Services Commission but do need to be managed within Jersey by a licensed trust company (e.g. Jordans Trust Company (Jersey) Limited). Jersey can therefore be viewed as a jurisdiction that is supportive of the establishment and use of PTCs.
Either choice can provide a solution for succession, asset holding and privacy issues. It very much depends on your individual situation. That's why we take care of finding the best solution that addresses each individual's unique circumstances.
You can find out more about our Trust and Foundations services here.