During times of economic distress we become more concerned about the security and tax efficiency of our assets, not only for the here and now but also for future generations. Though the recession forces us to spend less, it encourages us to give more. With the rate of charitable giving in 2011 surpassing economic growth in both the UK and US, it seems the business of philanthropy is thriving.
Perhaps one reason for its growth is that trust funds and foundations are not exclusive to the domain of the elite and wealthy anymore. In fact, they are fast becoming a sensible tax efficient strategy to managing any individuals? savings?especially if you are thinking of the stowing away some money for your loved ones and their futures.
Whether you?re objectives lie in succession planning, asset protection or charitable giving, it?s important to have the correct structure from the outset. The most common structures are discussed below and it should give you an idea of whether these are the right products for you.
1 ? Trusts
Dating back to the days of the Crusades, trusts are one of the oldest ways to ensure assets are delivered to their intended recipients. In its simplest form, a trust is formed when someone places their assets in the legal custody of someone else for the benefit of a third party. Using the jargon, a Settlor gives legal control of their assets to a Trustee for the benefit of a clearly defined Beneficiary. Trusts are commonly used for charitable giving and for many years have been utilised by a variety of organisations to provide benefit for either their employees or for other needy beneficiaries. Trusts are governed and utilised in common law jurisdictions, and historically the most popular jurisdictions are those where there is the most case law history, such as Jersey or Guernsey.
Trusts are a very powerful tool for estate planning and when used correctly, can minimize tax exposure and ensure that your assets are redistributed in accordance with your wishes. Privacy and asset protection are key advantages of a trust, for example the terms of a will are in the public domain, and trusts are not, also if a Settlor is in a partnership with unlimited liability these assets are out of the reach of his/her creditors.
Would-be philanthropists would typically opt for charitable trusts, and these are commonly used in the UK. They differ from a normal trust on the basis that the link between the trustees and the beneficiaries is broken, meaning that the beneficiaries have no legal standing against the trustees. Charitable trusts also qualify for HMRC advantages on the basis that it has a charitable purpose and public benefit.
2 ? Foundations
Like trusts, foundations offer privacy, succession planning and a high level of asset protection, but they also afford a higher level of control to the Founder. Where the interaction of a Settlor with the operation of a trust may have a detrimental impact on the discretionary nature of that trust, the use of Protector in a foundation structure provides a more hands on role for those concerned about the potentially unlimited powers of Trustees to control assets.
Foundations are primarily civil law tools, used where trusts may not be recognised or deemed appropriate. They originated in the early 20th century in Liechtenstein and are now commonly offered in jurisdictions including Panama, Bahamas, Dutch Antilles and Isle of Man. They have a special legal status based on civil law, which mix the legal components of a trust and a company. They have their own self-governing legal status, but they don?t have any shareholders.
Source: http://www.kippreport.com/2012/02/the-abcs-of-the-business-of-philanthropy/
denver broncos contraband tim tebow denver vs new england denver broncos vs new england patriots cruise ship sinking vernon davis
No comments:
Post a Comment