Why should I create a Family trust? A Trustee can help you protect your family by securing your assets and planning your estate.

One of its unique characteristics is the acquisition of ownership of the trust assets by the trustee in the settlor’s fiduciary capacity. Having said this, the beneficial ownership of said assets will continue to vest in the beneficiaries of the trust.

A trust is a legal entity created when one party, known as a ‘settlor’, wishes to transfer property to another party, the ‘trustee’. To hold, administer and perhaps employ and deal in the said property for the benefit of beneficiaries and or for one or more charitable purposes following the terms of the trust and applicable law.

Another characteristic is that a trust continues to protect the settlor’s assets if they lose the capacity to manage their affairs or after death. 

Why set up a family trust?

Passing on wealth via a will or lifetime gift can be inefficient in most scenarios. 

A trustee is requested to set up a trust to:

  • protect assets for beneficiaries who cannot look after the assets themselves;
  • set funds aside for the benefit of future generations (for example, to pay for education);
  • protect assets from divorcing spouses and business creditors;
  • ring-fence your property should you need residential care in the future;
  • provide for children under the age of 18 in an income tax-efficient way;
  • ensure that a current spouse and children from a previous relationship are all cared for.

What is the role of the trustee?

The trustee is the person the settlor appoints as the legal owner of the trust property. Trustees in Malta are licensed, regulated, and supervised by the MFSA. The legal obligation that binds a trustee means that they must deal with the trust property over which they exercise control for the exclusive benefit of the objects of the trust. The trustee has a legal duty of care to the beneficiaries and cannot receive any personal benefit from the trust other than fees and reimbursement of expenses incurred by the trustee in connection with the trust.

Malta is a jurisdiction for trusts 

It is rare to find trusts incorporated in the law systems of civil law countries. Malta, however, is different from a civil law jurisdiction that recognises the trust concept. In the Maltese trusts and trustees act, a trust may validly exist until the 125th anniversary of the date on which it came into existence and, unless sooner terminated, would then close. This limitation (against perpetuities) would not apply in respect of a trust created for charitable purposes, a unit trust, or a qualifying retirement scheme.

In the Maltese trust law, the comprehensive definition of a trust identifies three elements: the trustee, beneficiary, and settlor. The trustee and beneficiary are viewed as the key components of trusts in Malta, whereas the settlor is considered the third party that establishes the property in a trust.

Malta is among the few countries which acknowledge and enforces foreign law or trusts governed by international laws. Whether the settlor is establishing a trust as per the Hague Convention requirements or setting up a property trust governed by foreign laws, Malta’s trust jurisdiction will acknowledge and enforce any trust law.

One of the key reasons why the Maltese trusts laws have become a popular tool around the world is the ability to establish a customised trust. Trusts can be established with solutions that meet your needs. Malta is also among the few jurisdictions that have successfully incorporated the Anglo-Saxon trust concept.

The establishment of a trust in Malta has suggestively lower administration and set-up costs that are required compared to other jurisdictions. While the set-up cost remains reasonably lower, the Maltese professional classes have upheld an unquestionable global reputation.

Malta offers high-quality services in the form of professional trustees. Zeta’s subsidiary Premier Fiduciary and Trusts Limited, Co Reg No. C54929 is authorised to act as a Trustee or Co-Trustee, to provide Fiduciary Services and to act as Administrator of Private Foundations by the Malta Financial Services Authority.

Contact us to schedule a call or meeting for further information on establishing a trust in Malta.