Quanta Offers Professional Protector Service for Off Shore Trusts

April 5, 2011 - PRLog -- What is a Trust?

The concept of a trust originated in the English legal system and is now widely recognized internationally. Trusts have considerable flexibility in the types of assets they can manage and how those assets can be distributed. Once the legal threshold for the creation of a Trust is met, Trusts usually offer tax advantages and protection from creditors and other liabilities and are valuable for the generational preservation of wealth.

All Trusts have a common thread running through them; they are entities unto themselves. Once assets are placed in trust, by the settlor, the assets forever belong to the Trust, until the “Trustee” disburses the assets to the beneficiares or the Deed of Trust expires; commonly in 99 years.  How the Trust assets are to be disbursed is usually laid out in a “letter of wishes” written by the settlor at the time the Trust is formed.

What many Trustees fail to fully explain:

As previously stated the settlor of a Trust transfers assets into the Trust. However, a Trust is not a corporation where the shareholders direct the director. The settlor, by law, cannot have authority over the Trust or the Trustees. A Trust is not a bank account that you can withdraw from or close anytime you desire.  All assets belong to the Trust and the Trustee has sole authority over the Trust, its assets and when and if those assets are distributed and to whom.

Trust deeds give the Trustees total authority to invest, sell and distribute assets as the Trustee deems. The Trustee also has the power to add and delete beneficiares. The settlor’s “letter of wishes” is just that, a wish, it is not binding on the Trustee. The Trustee can tell you, no. You have no real course of redress; the assets are not yours they belong to the Trust.

The Business of Trusts Companies:

When entering into a Trust, with a Trustee, the Trustee should supply the settlor with a rate schedule for services. Many will even guarantee these rates, in writing, for a period of time. Sounds like a good practice and a good selling point for the Trustees who, in reality, are most often Trust companies; corporations not individuals. But there is a growing tendency for these corporate Trustees to have multiple “Trusts companies” within the corporate group and routinely transfer Trusts between them by way of an instrument called a DORA; Deed of Retirement and Appointment. The group is structured so Trust clients cannot identify it as being a corporate group of companies. They appear to be independent Trust companies.

When a Trustee “retires” and transfers the Trust to another “Trustee”  all previous agreements with the settlor are not binding on the “new Trustee”; specifically the rate agreement. Remember, the settlor has no say in who can be appointed a Trustee once the Trust has been entered into. Quanta has seen what these inter-group transfers have done to the unknowing clients. Annual fees have tripled, administration time doubled and there is nothing the settlor or beneficiares can do except complain to the “new Trustee”. The Trustee does not bill you for their fees they take fees from the Trusts investments. Of course you can always run to a lawyer, lawyers will sue anybody for anything even if it bankrupts you and the Trust. You see most Trust deeds give the Trustees the power to defend the Trust using the Trust assets.  In reality, you are paying a lawyer to sue yourself.

The Protector:

Trusts can have a “Protector” clause written into the deed. But, this must be done at the inception of the Trust; it cannot be added later. Even though, legally, the settlor and beneficiaries cannot control the Trustee, a Protector can to a limited extent. However, the Protector cannot direct the Trustee as to investments, fees or distribution of assets; but does have sufficient powers to protect you from unscrupulous Trustees. These powers include restricting the Trustee from adding or deleting beneficiaries and most important the power to remove the Trustee; something the settlor and beneficiaries cannot do.
Sadly, if a settlor request that a Protector clause be written into the deed (if the settlor is even made aware of this option) the Trustee many times will recommend that a relative or close family friend be appointed as the Protector. “Aunt Mary” or “best friend Frank” probably know less about Trust than most lawyers know; which is very little.

Quanta’s Professional Protector Services:

Quanta, does not normally act as a Trustee; only on a special request from a valued client that we provide offshore company services to. As a general practice Quanta refers potential Trust clients to vented Trustees who we know to be upstanding.
However, Quanta does provide Professional Protector services for Trusts. As we have been in the business we know how to deal with Trustees. We work for the settlor and beneficiaries and have quarterly reports on the Trust assets sent to us. If you do not like what the Trustees are doing, or have done, Quanta will exercise the powers of the Protector and move the Trust to new Trustees that you and Quanta will choose; not the Trustee. Using Quanta gives you something you do not have under the Trust Deed; ability to fire the Trustee. Through Quanta you can legally control your Trust and its assets.

The Trustees will know right away that we are not “Aunt Mary”.

If you are considering forming an offshore Trust contact Quanta first to discuss it; it’s free advice.

Already have a Trust without a Protector?
Contact Quanta.

If your deed does not permit the addition of a Protector Quanta will personally advise you as to your options: it’s a free service.

For further information about Quanta's Professional Protector services please contact us.

Stella Smith
Executive Director
Quanta Consulting Ltd.
9 Rue Verdaine
P.O. Box 3320
1211 Geneva 3
Switzerland
Tel: +41 22 533 2119
http://www.quantaconsulting.ch

For All Business off shore needs: company formation, corporate and private offshore bank accounts, fund formation, corporate directorships and nominee shareholding companies.

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Quanta’s main priority is confidentiality and security combined with a high level of service; presenting the Client with the best possible options to insure that all is in the best interest of the client.