Для обеспечения будущего детей, то есть финансирования их образования, покупки ними недвижимости или создания собственного бизнеса можно создать кипрский инвестиционный траст (CIT). Такая правовая форма обеспечивает сохранность и приумножение активов, несмотря на банкротство, развод или смерть родителей, таким образом, в последнем случае декларация об учреждении траста играет роль завещания. Автор настоящей статьи рассматривает порядок создания и функционирования CIT.
Advantages of setting up a CIT
How does a CIT work?
Trusts are widely used as an effective tool to maintain and grow assets. Parents have recently become more sophisticated in investing their wealth to safeguard their children’s future and are often willing and determined to start saving money for their children as soon as they are born and sometimes sooner. Typically, a parent’s main concern is being able to pay for their children’s education and ensuring the best start for them when they grow up and want to purchase property or launch their own business.
One way to accomplish these goals is to set up a Cyprus Investment Trust (CIT). A trust can function like an investment fund which allows a trustee to manage its assets for the good of the beneficiaries.
Trusts are also a great way for parents of disabled children to ensure that their children are properly taken care of during their lifetime. In such cases, assets or property which is held in a trust may not be necessarily released to a disabled beneficiary, though such a trust will guarantee that their needs are properly met.
In any case, parents can rest assured that even in the unfortunate case of death, divorce or bankruptcy, assets placed into a trust for children will be protected and used for the benefit of their children as prescribed in the trust instrument.
Advantages of setting up a CIT
Setting up a CIT for children is easy and allows parents to tailor a trust to fit their unique circumstances. In this regard, parents can work with specialised lawyers to draft a tailored trust instrument for their children which ensures that:
they receive a steady income;
their assets are protected;
there is a predictable tax regime;
they have immunity against ungrounded claims; and
they have full confidentiality.
If properly executed, a trust is a convenient vehicle for maintaining and growing wealth in a tax-advantageous manner. There are many advantages to having a trust. Assets which are transferred to a trust are held and managed in full confidentiality – there is no need to provide the names of beneficiaries, but only the class of persons who will be beneficiaries (eg, son or wife). Moreover, transferring assets to a CIT protects them from any claims brought by the state of the settlor’s residence.
Wealthy parents may be willing to set up a trust for children whereby the parents can distribute the inheritance in advance among their heirs as they deem appropriate as an alternative to a will. In such a case, the parents can guarantee that their children will inherit their stakes:
without a probate period applicable in their home jurisdiction;
free of taxes attributable to the inheritance in their home country; and
free of other claims relating to the assets or property transferred to the trust.
Another advantage of creating a CIT is to protect assets from a beneficiary’s negligence. To this end, parents may hire a professional manager to manage the trust and authorise them to control and manage family assets and property in a manner that will ensure:
the proper functioning and use of inheritance after the parents’ death (with or without the immediate release of assets or property); and
a steady income for their children.
Parents have the option and discretion to include a clause in the trust that could limit the use of such income to financing only certain activities defined by a trust instrument or subject to satisfaction of pre-defined criteria.
While the benefits of setting up a trust for children are many, there are important legal matters to consider. One such issue is choosing the right jurisdiction. Cyprus offers a number of advantages for establishing a trust for children. For example:
it is an EU member state that has progressive legislation and liberal tax and financial regulations; and
its legislation governing trusts and international trusts has evolved significantly over last couple of decades (CITs are governed by the Trustees Law 1955, Cap 193 and the International Trusts Law 1992 (as further amended in 2012)).
How does a CIT work?
Under the International Trusts Law, the following conditions must be met in order to set up a trust for children in Cyprus:
The settlor (parent), either a natural or legal person, must not be a Cyprus resident during the calendar year preceding the trust’s creation. The settlor must have legal capacity to transfer assets or property to a trust (ie, at the time of transfer they must be of full age and of sound mind under the law of the country in which they are resident).
Beneficiaries (generally children in the case of family trusts), either individual or legal entities, must not be Cyprus residents during the calendar year preceding the trust’s creation.
At least one trustee must be a Cyprus tax resident when the trust is established and for its duration.
A trust deed must be stamped in Cyprus. Details of the trust instrument (ie, the CIT’s name, the trustee’s names and the date on which the trust was established must be registered with one of the three authorised regulators).
A trust may also involve a guardian or protector (ie, a person other than the trustee to whom powers of any nature are conferred by the trust instrument). A guardian or protector’s role, powers and authorities are regulated by the trust instrument. Although appointing a guardian or protector is not mandatory, it can be helpful for a parent who may not have the time or know-how to manage the trust themselves.
A valid Cyprus trust must clearly state the express intention of setting up a trust for children. It must further identify the asset or property which is subject to transfer to a trust. A valid trust must also ensure that the beneficiaries are identified at the moment of the trust’s establishment. Provided that a CIT meets the above criteria, it will not be void or voidable, and no claim can be made in respect of its assets or property unless, and to the extent that, it is proven to the satisfaction of the courts that the international trust was established with the intent to defraud a settlor’s creditors at the time of the transfer of their assets to the trust. The burden of proof lies with the creditors.
Parents can play a more active role in a trust by becoming co-trustees or members of a trust’s board and playing a visible role as a guardian, protector or executor. For instance, the board of directors can consist of a settlor, their spouse and any other trusted persons alongside a professional director that will ensure control by a settlor at board level in addition to voting rights as a trust member.
However, since the day-to-day activities of a trust can be quite challenging and require more time and effort than a settlor may be able to devote, they can delegate matters to an experienced provider of trustee and fiduciary services (as a rule, such services are provided by experienced Cypriot law firms) once a trust has been established.
Автор: Angelos Paphitis