To build a trust means building the future.
Nowadays, thinking of future is not so easy, mainly for the difficulties and unexpected events in the everyday life. For this reason, it’s important to build a strong base for the retirement time, or anyway to ensure a future to our family. To invest for the constitution of a trust undoubtedly is the best way of action for an entrepreneur, a professional or a family man that desires to guarantee for himself a better future.

What is a trust?
Trust is an English term that is rooted in the countries with Common Law jurisdiction.

The settler and trustee, thus, conclude a trust agreement with a judicial relationship based on the trust between the two parties. Consequently, the settler put in the trustee’s hands his assets, that will be handled on behalf of the beneficiary and for the previously agreed purpose. Sometimes the original beneficiary can be different from the final one, but there are some cases of trust in which the final beneficiary is not evident, that’s why it’s called opaque trust.

There are also the trust companies, that have as social object the assistance to customers in the trust institution and in the subsequent management of assets. It’s important to specify that the trustee can be represented both by a natural and juridical person.

The main consequence of a trust is the segregation of assets, for which all that is made available to the trust, constitutes a legally separated asset from the trustee’s one.

This means that the creditor cannot claim what’s put in the trust, independently from any eventual attack to the trustee, the settler or the beneficiary of the legal construct.

Moreover, the use of trust ensures high levels of privacy at capital level.

THE TRUST is used for different purposes and is a flexible and dynamic device that can be custom-made for any different request.

Typology

ASSET TRUSTS:  this kind of trust allows the constitution of assets made up of real estates. The advantage is that no one can claim over this kind of trust, except its creditors. The trustee is supposed to take care of the complete management and all the procedures connected to the assets, as their sale. Asset trusts are suggested in many cases: to protect family heritage, to prevent eventual insolvency proceedings, to protect assets from aggressions, and so on. Generally, this kind of trust is suggested instead of the traditional institution of family trust.

TRUST FOR DISABLED PEOPLE:  In case of disabled with the use of trusts it’s possible to handle their assets like: real estates, money, movable assets, securities, policies, and so on. In this way you can safely manage the assets and protect the person, more than you can get from support administration or forms of protection and curatorship. Infact these institutions are subject to long lasting and boring procedures: for example for a property sale it’s required authorization from the Court, and investments are supposed to be made in no other way than government securities.

FAMILY TRUST: in Civil Law this is mainly suggested for family affairs. Thus inheritance, cohabitation or kinship relationships, marriage crisis, separation and divorce. Family trust is mostly suggested in the last two cases, to better manage marital relationships, even in presence of sons.

TRUST COMPANIES: this type of trust is useful to regulate both generation changes inside the company and also to separate part of company assets, to move company branches, to protect the assets, and shares. Trust companies allow to save money and benefit from tax benefits.

TRUST AS WARRANTY: this enables to intervene in different kind of assets (real estates, movable ones, funds, so on). For this we have assets created for which warranty is required, and the person for whom warranty is granted, will have the possibility to rely upon unassailable assets (e.g. surety). This kind of trust grants many advantages.

Eligible operations

By trust you can make deeds of sale or purchase of goods- with no imposition- according to the nature and judicial effects that characterize them.

TRANSFER OF GOODS TO THE BENEFICIARIES: There are no impositions as for the application of the tax on successions and donations.

TRANSFER OF GOODS IN THE TRUST: There are variations according to the subject making the transfer and the transferred good.

GOODS RELATED TO THE ENTERPRISE: if the goods being part of the trust are used for purposes out of the same activity it happens that the settler (the entrepreneur) is supposed to submit for imposition the revenues of the goods’ transfer, according to their value. If the object of the transfer is a company, the transfer can take place with no fiscal relevance at the condition that the trustee takes over the trust without capital gain.

GOODS UNRELATED TO THE ENTERPRISE: If the transfer takes place with no counterpart, there are not fiscal consequences as for income taxation neither for the settler, nor for the trust, and nor for the trustee. The transfer of the title of participation, instead, leads consequently the trustee to take over the last tax burden indicated for the participation. In case the titles were possessed by an administered relationship, it’d be up to the intermediary the tax application.

TRANSFER OF THE GOODS IN THE TRUST: Capital gain would be taxable if the transfer took place outside the enterprise activity and constituted a different income according to the tax assessment of the settler, and in case the goods’ transfer occurred by a trust purchase, it’d be taken as reference the amount paid for the transaction.

TRUST RESIDENCE: To settle its residence you’ve to consider different aspects: the territory of the jurisdiction, the effective headquarter of trust administration and the most relevant object of the trust. In order to reduce tax burdens, you’d be better to follow the CDI dispositions

REGULATORY LAW OF TRUST: The foreign law regulates trust. Many are the jurisdictions recognizing trust institution and, according to the specific needs, you can spot the most suitable to you.

Final Remarks

Trust is often wrongly associated to detraction of patrimony, tax elusion, hereditary cheatings. However, this diffidence has no foundations since the use of trust does not prevent from any eventual civil actions nor does limit the effects of previous pronunciations.  This juridical institution, if properly conceived and used, guarantees a major patrimony protection, in conformity both with national and international norms.

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