An Analysis: Trusts Vs. Foundations

Trusts and foundations are both effective vehicles for asset protection, succession planning and charitable endeavours. Whilst foundations are well-established in civil law jurisdictions, their relatively recent introduction in a number of common law jurisdictions raises questions on the differences between the two structures and their relative benefits and disadvantages. This article provides a brief comparative analysis of the two structures.

THE FEATURES OF A TRUST

A trust is established when the legal owner of assets (the settlor) transfers the legal ownership, dominion and control of those assets to trustees. A trustee can be an individual or a corporation. The assets are held by the trustees for the benefit of beneficiaries who are identified (either by reference to a class or specifically named) by the settlor or for a specific purpose (charitable, non-charitable or both). Whilst the legal title of the trust assets vests in the trustees, the beneficiaries