What is a Trust?
A trust, sometimes referred to as a settlement, is an arrangement under which a person (called "the Settlor" or in the US "the Grantor") gives (i.e., passes legal ownership of) assets to a company or a group of people (called the "Trustee") to hold for the benefit of a third party (the "Beneficiary"), which may or may not include the Settlor. In legal terms the trustees are the owner of the assets passed to them, but they may not receive any benefit from them, other than agreed fees and disbursements.

What kind of trusts are there?
There is the charitable trust, living trust or a revocable trust. A "Living trust" and "revocable trust" are often used interchangeably. This type of trust can be changed or even canceled any time you wish. A charitable trust is irrevocable and, once created, cannot be altered. Quijano & Associates can help clients form trusts in various jurisdictions, including Panama and the British Virgin Islands.

Who chooses the Trustees?
The Settlor (client) does and, must be sure that the Trustees will look after them prudently and professionally. A Trustees' overriding duty is to ensure that the assets entrusted to him are managed for the benefit of the Beneficiaries in the shares set out in the Trust Deed. Once the Trust Deed accurately reflects the wishes of the Settlor, he/she and the Trustees sign the Deed. The Beneficiaries do not sign and may not even know of the existence of the Trust.

Do I need a Trust?
Yes, if you’re considering ways to ensure that assets are passed from generation to generation in a specific sequence, to protect the family's inheritance from reckless spouses, or to look after the assets in the case of minors.

What is the Trust Deed?
The Trust Deed is a legal document, which sets out the terms of the trust. The powers of the Trustees - what they can and cannot do are determined by the terms of the Trust Deed.

Can a Trust make investments?
Yes. Any investment permitted by the terms of the Trust Deed, providing the Trustees can justify that it is beneficial to the Beneficiaries. Where there is one beneficiary of the income and another of the capital, the Trustees must ensure that their investment policy is fair to both parties e.g., zero coupon bonds would disadvantage the income beneficiary. The Trustees should never make reckless investments since, in the case of proven negligence, they can be held personally responsible for any losses.

What is estate planning?
It is a planning procedure that determines how someone's assets, also known as their estate, will be distributed after that person dies. It might be as simple as just signing a will or it might be complicated with living trusts, foundations, life insurance trusts, and other methods of avoiding probate and reducing taxes after death.

What is a Panama Private Interest Foundation?
This estate planning vehicle was inspired, and to a large extent modeled after, the law regulating the Family or Mixed Foundations (Stiftung) of the Principality of Liechtenstein. It is a hybrid entity, meaning it captures characteristics from both the trust and the corporation. A Foundation is an entity that is different from any other legal entity known in Anglo-Saxon law because it is not the legal personification of a person or group of persons (as with a corporation), rather it is a legal entity that does not have owners (share-holders, participants, or partners), and it traditionally has a specific purpose for the benefit of a general group of individuals.

What types of trusts exist in the BVI?
There are a number of different forms of trust, some of which are used more than others. The following is a brief description of some of the more commonly used forms of trusts:

• Discretionary Trust: A Trust where distribution of funds to the beneficiaries is mainly at the discretion of the Trustees
• Inter-Vivos Trust: An expression used to indicate a Trust created during the Settlor's lifetime.
• Purpose Trust: A Trust that is not a trust for the benefit of an ascertainable person or group of persons but is established for a stated purpose or purposes.
• Fixed Trust: A Trust where the interests of the beneficiaries are clearly defined.
• Asset Protection Trust: A trust that is established in a jurisdiction which has provisions in its trust legislation to provide enhanced protection for the assets of the trust fund.

What are the principal components of a BVI trust?
The principal components to a Trust are:

• A Settlor or Grantor
• One or more Trustees
• A Trust Fund
• One or more Beneficiaries

There is often an additional component called a Protector. A Protector is a person appointed by a Settlor to whom the Trustee can look for advice in relation to distribution and administration of the Trust Fund. Usually, a Protector is a trusted confidant of the Settlor who will be able to advise the Trustee as to the proper course of action or as to the wishes of the Settlor during his lifetime or after his death. The Protector may be given powers in the Trust Deed to veto certain Trustee's decisions, for example in relation to the duration of the Trust, addition or removal of Beneficiaries, removal and appointment of Trustees and distributions.