Estate and Succession Planning: Guernsey Trusts and Foundations
Introduction
The Dixcart Group has remained privately owned by the Dixcart Family Office since it’s foundation over fifty years ago in 1972. Excelling in the implementation of advice and provision of support and services for both straightforward and highly complex international Estate and Succession Planning since its foundation, the Group is intimately experienced in the complex nature of Family Office matters and therefore uniquely placed to act.
Guernsey Trusts and Foundations
Estate and Succession planning is a key concern for high-net-worth individuals and families looking to ensure the smooth transfer of wealth to future generations. The use of trusts and foundations is a popular strategy for high-net-worth individuals seeking to manage and protect their wealth for future generations. Guernsey, a British Crown Dependency located in the English Channel, is a leading jurisdiction for the establishment and administration of trusts and foundations.
Not only is the use of trusts and foundations a popular strategy they are also powerful tools for succession planning in Guernsey, offering a range of benefits for wealth preservation and management.
Trusts
A trust is a legal arrangement in which a person (known as the Settlor) transfers assets to a trustee, who holds and manages those assets for the benefit of one or more beneficiaries. In Guernsey, trusts are governed by the Trusts (Guernsey) Law 2007, which provides a flexible and modern legal framework for the establishment and management of trusts.
Trusts are a popular choice for estate and succession planning in Guernsey. By creating a trust, a Settlor can transfer assets to a trustee who will hold and manage them for the benefit of one or more beneficiaries. The trustee is legally bound to manage the trust assets in accordance with the terms of the trust deed, ensuring that the Settlor’s wishes are carried out.
Benefits Offered through the Use of a Trust
Trusts offer a range of benefits for estate and succession planning, including:
- Continuity: Trusts can be designed to have perpetual existence, ensuring continuity of wealth management across generations.
- Asset protection: Trust assets are held by the trustee on behalf of the beneficiaries, providing protection against creditor claims and legal challenges.
- Confidentiality: Guernsey trusts offer a high degree of privacy and confidentiality, with no public register of trusts or disclosure of beneficiary information.
- Tax efficiency: Guernsey has a favourable tax regime for trusts, with no capital gains tax, inheritance tax, or estate duty.
Foundations
Foundations are another popular choice for estate and succession planning in Guernsey and are governed by The Foundations (Guernsey) Law, 2012. A foundation is a legal entity which while similar to a trust in many respects, has some key differences.
Unlike a trust where assets are held in the name of the Trustee a foundation is a legal entity in its own right. Assets are held in the name of the foundation which is managed by a council of members or directors. The foundation’s constitution sets out the rules governing the management and distribution of its assets.
Benefits Offered Through the use of a Foundations
Guernsey foundations offer a range of advantages for estate planning, including:
- Legal personality: Foundations have their own legal personality and are more easily understood in civil law jurisdictions where the common law concept of a trust is not always compatible with local legislation.
- Continuity: Foundations can be designed to have perpetual existence, ensuring continuity of wealth management across generations.
- Asset protection: Foundation assets are held by the foundation on behalf of its beneficiaries, providing protection against creditor claims and legal challenges.
- Tax efficiency: Like trusts, Guernsey foundations offer favourable tax treatment, with no capital gains tax, inheritance tax, or estate duty.
- Flexibility: The Foundation Charter can be tailored to each individual Founder’s requirements and circumstances.
Conclusion
Trusts and foundations are powerful and adaptable tools for estate and succession planning. With a favourable legal and tax environment, Guernsey is a leading jurisdiction for the establishment and administration of these structures. High net worth individuals and families can work with experienced professionals at Dixcart, to design and implement a tailored estate and succession plan that meets their unique needs and objectives, ensuring the smooth transfer of wealth to future generations.
Further Information
For further information or if you have questions regarding succession planning advice, services and support please contact the Dixcart office in Guernsey: advice.guernsey@dixcart.com
Dixcart Trust Corporation Limited, Guernsey: Full Fiduciary Licence granted by the Guernsey Financial Services Commission.
Dixcart Fund Administrators (Guernsey) Limited: Protection of Investors Licence granted by the Guernsey Financial Services Commission
