ASSET PROTECTION

One of the biggest objectives set by today’s investors is to make sure that their portfolios work hard for them at all times and through all conditions. This is made possible by sophisticated strategies and fast moving markets but very often investors overlook one very important factor that may have a damaging or even negative effect on all of the good work and results achieved along the way.

Keeping hold of the wealth created is just as important as creating it in the first place – in fact some would argue more so! It is for this reason that serious consideration should be given to the correct holding structure of any portfolio at outset.

Investment Portfolios may be put under a discretionary trust. This trust is legally owned by the ‘trustees’, who you appoint and give direction to. With you as ‘settlor’, and whoever you want to have the asset as the ultimate ‘beneficiary’, this structure will guarantee that the assets are passed to the rightful ‘beneficiary’ and avoid the many potential problems that often arise as a result of insufficient planning. The ‘trust’ can also make sure that your assets are kept away from governments, lawyers, ex-partners and wives. In summary the ‘discretionary trust’ allows a good measure of asset control and protection.

Basic examples of this are: assets being held in ‘trust’ for your children until they reach the age of 18 whilst supporting their higher education in line with the terms of your ‘expressed wishes’ to the trustees. An income may be paid to your widow, while holding unsavoury predators at bay.

In addition, you may use your trust to reduce home-country tax liability by putting appreciating assets into trust before they breach higher income tax or capital-gains tax bands.

‘Trustees’ come steeped in tradition and can be a financial group established hundreds of years ago. They very often look after and direct billions of pounds of client assets, and are likely to be around for generations after you and your heirs. Confidentiality and investor protection are just two of the phrases closely aligned to the word ‘trust’.

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