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Turks & Caicos Attorneys | Turks & Caicos Law

M & S TRUST COMPANY LIMITED

M&S Trust Company Limited is a full service trust company offering a wide range of fiduciary, investment and agency services.

The trust company has an unrestricted license to provide corporate trusteeship services pursuant to the Trustee (Licensing) Ordinance 1992.

The Trust Company maintains liability insurance in the amount of $5 million per occurrence.

Further information on Trusts and the benefit of forming a Trust in Turks and Caicos Islands is found by following below.

TRUSTS AND THE TURKS & CAICOS ISLANDS

Some of the main features of a TCI trust are as follows:

Severable Aspects
The validity of the trust, the interpretation of its terms and the administration of the trust property are each regarded as severable aspects. The trust instrument may also provide for the law applying to each aspect to be changed from time to time.

Exclusion of Foreign Law
The Ordinance contains provisions excluding the applicability of foreign law to the creation of a TCI Trust and to dispositions made under it. For example, in the absence of an express term to the contrary the laws of the settlor's home jurisdiction have no application to the question of whether the trust or any disposition of property of the trust is valid or enforceable.

Rule Against Perpetuities
This does not apply to a TCI trust, the trust instrument may specify the duration of the trust.

Concept of the Protector is Given Statutory Recognition
It is common, particularly in discretionary trusts where it is for the trustee to decide who is to benefit under the trust and when, to require the trustee to obtain the consent of a named party before exercising his powers.

Protective Trusts
The trust instrument may provide that the interest of a beneficiary is liable to be diminished or terminated or subject to a restriction on alienation (a protective trust).

Trustee to act fairly as between beneficiaries, not necessarily even-handedly. The trustee can be given wide discretion in relation to the various interests of beneficiaries and wide powers of accumulation and advancement. The overriding consideration is that they act fairly between one beneficiary and another.

Asset Protection Trusts
TCI's law contains specific provisions facilitating the establishment of trusts designed to protect assets from ex-propriation and claims by persons whom the settlor wishes to exclude from his or her estate whilst recognizing the rights of bona fides creditors.

Privacy
The Ordinance provides that a trustee is not required to disclose to any person any document showing he has exercised a power or discretion or performed a duty, nor to disclose to any person other than a beneficiary any document relating to or forming part of the accounts of the trust, unless required to do so by the terms of the trust or by an order of the court.

Supervision
The supervisory authority in the TCI is the Superintendent of Trustees, Financial Services Commission, Post Office Building, Grand Turk, Turks and Caicos Islands.

Benefits of a TCI Trust
Trusts can be used for tax planning purposes. There are several different sets of circumstances under which persons might wish to dispose of their property during their lifetime. For example, in countries where taxes are levied upon a person's estate upon their death, it is prudent to mitigate the incidence of taxation by reducing the size of estate before death. Similarly, where the property is income producing, disposing of the property may reduce the settlor's income tax liability. Settlors can minimize their tax liabilities through the use of Turks and Caicos Islands trusts particularly if they intend to move from one country to another. Where TCI is the situs of the trust, it may be possible to avoid tax on capital gains in the settlors domicile in addition to any income tax which would otherwise be payable.

Where settlors reside in a country which does not recognise the trust concept and has laws which can override their Will, they may, by the use of a TCI trust, be able to prevent their property passing to members of their family whom they wish to exclude.

Since the trust is a separate legal entity created when the settlor transfers assets by deed to a trustee for the benefit of named beneficiaries, the need for probate or letters of administration on the death of the settlor is eliminated.

Individuals for any number of good reasons, may wish to keep their affairs private, for example, regarding asset ownership and this is effectively achieved by creating a TCI trust. Settlors can isolate property in an offshore trust and thereby minimize risk associated with economic and political instability.

The settlor is able to maintain a measure of control over the trust/trustee either: 1. by declaring the trust to be revocable, or 2. if the trust needs to be irrevocable, for other good reasons, by naming a third party as protector of the trust and giving that party power to change the trustee.

Types of Trusts
The basic types of trusts for individuals are:

Fixed Trust
In a fixed trust the settlor specifically defines the interests of each beneficiary as to when and to what extent distribution of capital and income should be made.

Discretionary Trust
In a discretionary trust the settlor gives the trustee wide discretion to make distributions of capital and income to the beneficiaries in such a manner as the trustee sees fit. A trust is highly flexible as a settlor may amend a statement of wishes at any time.


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