Trust settlement

The trust settlement is based on the Anglo-American model.
This legal instrument can be used similar to the foundation, however allows more leeway with the structure, as it does not know any restriction to object, as envisaged in the foundation law.
The settlor grants the trustee or salmann movable or immobile assets or a right (as trust property) with the obligation to manage or use this as trust property in own name as independent legal entity for the benefit of one or several third parties (beneficiary) with effect against all persons.
As opposed to the foundation the trust settlement does not concern a legal entity, but a legal relationship with a character similar to a contract.

Establishment

The parties involved are:
» the settlor (founder) whereby the contractual relationship (trust document = formation act)
must be prepared in writing
» the trustee(s) (the office must be accepted in a written form)
» the beneficiary (beneficiaries)

Formation

In practice the trust settlement is in particular formed when the agreement is signed (trust document) by the settlor (founder) and trustee or by trust letter. The facultative entry in the public register
(instead of the deposit) does not have any constitutive effect.

Registration or deposit

Insofar as the entry in the public register is requested the following details are to be provided: date of the establishment, description of the trust settlement, duration (can be indefinite), name and address of the trustees (not however the beneficiaries and the settlor).
As an alternative to the registration there is the possibility of the so-called deposit of the trust document at the public register department. In this case the existence of the trust settlement cannot be seen from any register and inspection is only possible with the consent of the trustee.

Trust property

No minimum trust property (asset grant) is stipulated.

Management

The trustee(s) are responsible for the management. The trustee manages the assets in his own name with personal responsibility for the benefit of the beneficiaries.

Beneficiary

The settlor (founder) can be the beneficiary himself, however the trustee on his own not. If no references to beneficiary are clear there is the legal presumption that the settler himself is the beneficiary.

Control bodies

In order to ensure the compliance with the provisions in the trust document by the trustee a revision department, a protector (advisory board), a curator or a collator, as described with the foundation under «Bodies», can be appointed.

Foreign law

Trust settlements according to foreign law can be established in Liechtenstein. However, Liechtenstein law is applicable in the external relationship.

Preparation of a balance sheet

This is not obligatory. Thus the revision department and the obligation to submit the balance sheet cease to apply. The trustee is obliged to keep the trust property strictly separate from his own assets. Under certain circumstances an orderly bookkeeping may be necessary in this respect.

Taxes

The asset grant to the trustee, which is carried out through persons with domicile overseas and the distribution to the beneficiaries who live overseas do not trigger off any liability to tax in Liechtenstein. Thus principally the mentioned capital tax of 1‰ on the net assets, at least however CHF 1,000.– per annum, is to be observed.