Family Trust Company
Our starting point when advising on establishment, restructuring and re-domiciliation of a family trust, is to understand the particular circumstances and dynamics of the family and the purposes of the office.
Malta is a particularly favourable jurisdiction in which to establish family wealth structures and, in particular, family trust companies.
A Malta family trust company is akin to a private trust company found in other jurisdictions, such as Jersey. Providers of both trusts and foundations in Malta are highly regulated by the MFSA.
Legislation amending the Trusts and Trustees Act of 2004 in 2014 has resulted in the introduction of the concept of family trusts companies, property settled upon trusts for the present and future needs of family members and family dependants.
Family trust companies offer some interesting opportunities for high-net-worth individuals and families who favour a tailor made trustee solution in which they can actively take part in, on a formal or informal basis, especially when compared to mainstream professional or institutional trustees.
Family trust companies that satisfy the prescribed legal requirements are not required to obtain full authorisation, although they must apply for registration with the MFSA and adhere to ongoing compliance and other regulatory conditions, which include:
- Company Structure: Must be set up as a limited liability company (Ltd) with its activities strictly limited to acting as a trustee for specific settlors.
- Settlor Limit: The trust can have a maximum of five settlors.
- Board of Directors: A minimum of three directors is required on the board. At least one director must possess proven knowledge and experience in trust law and administration.
- Beneficiaries: The trust must be for the benefit of the family members of the settlors.
- Regulatory Compliance: A Money Laundering Reporting Officer (MLRO) must be appointed to ensure adherence to anti-money laundering regulations.
What is a Family Trust?
A family trust is a legal arrangement designed to hold and manage assets for the benefit of family members. It acts as a private, bespoke structure for wealth preservation, succession planning, and asset protection. Unlike a standard trust managed by an institutional trustee, a family trust, often administered through a Family Trust Company (FTC), allows the family to maintain a significant degree of control and involvement in the management of their assets, ensuring that their specific values and objectives are upheld for generations to come.
Key Benefits of Establishing a Family Trust in Malta
Establishing a family trust provides a robust framework for managing family wealth with numerous advantages. Malta’s legal system offers a particularly secure and beneficial environment for these structures.
Asset Protection
Safeguard family assets from creditors, political instability, or legal disputes. Assets placed in a trust are legally owned by the trustee, separating them from personal liabilities.
Succession Planning
Ensure a smooth and efficient transfer of wealth to future generations according to your specific wishes, avoiding the complexities and potential delays of probate.
Confidentiality
Trust arrangements in Malta are private and not publicly registered, offering a high degree of confidentiality for the family’s financial affairs.
Centralised Management
Consolidate the management of diverse family assets, including property, investments, and business shares, under a single, professionally governed structure.
Flexibility and Control
A Family Trust Company allows family members to be involved in the decision-making process, providing more control than a traditional institutional trustee.
Tax Efficiency
Malta’s favourable tax regime can offer significant advantages for trusts, providing an efficient structure for wealth growth and distribution.
Family Members and Dependents
Dependents and family members in respect of family trust companies refer to any individuals related to the settlor creating the trust, by consanguinity, adoption or affinity in the direct line up to any degree, whether as an ascendant or descendant. If in the collateral line, this is up to the fifth degree inclusively.
The trust instrument is to provide for a charitable purpose, or an institution set up for such purpose, which will benefit as a residual beneficiary upon the termination of the family trust.
Acumum’s Service Offering
- Organising the implementation and ongoing maintenance of family wealth and investment structures
- Establishment of family trusts/foundations and family trust companies
- Acting as ‘knowledgeable’ director of family trust companies
- Ensure ongoing legal and regulatory compliance
- Regular asset summaries, activity reports and accounts
- Oversight of asset, investment strategies and third-party providers
- Preparation of management and financial accounts
Our overall aim is to ensure that the operation of tax structures are established and sensibly governed, while being run efficiently and effectively.
