Trusts for Internationally Mobile Families: A Plain English Guide

What Is a Trust?

A trust is a legal arrangement in which one person (the settlor) transfers assets to another person or organisation (the trustee) to hold and manage for the benefit of specified individuals or a class of people (the beneficiaries). The trustee holds the legal title to the assets but is obliged to use them only for the benefit of the beneficiaries, in accordance with the terms of the trust deed and any applicable law.

Trusts are a creation of English law, dating back to the crusading era when landowners transferring property to trusted friends before departing for war needed a mechanism to ensure it was managed for their family in their absence. The concept has evolved significantly over seven centuries, and today trust law is the bedrock of wealth structuring for high-net-worth families across common-law jurisdictions worldwide.

For internationally mobile families, trusts serve several distinct purposes: asset protection, estate planning, tax efficiency, family governance, and philanthropy. This guide explains the fundamentals of how trusts work, why families with a global footprint use them, and the key questions to consider before creating one.

All information is as of 2026. Tax and trust law is complex and jurisdiction-specific — always seek professional advice before acting.

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The Key Parties to a Trust

The Settlor creates the trust by transferring assets into it. The settlor defines the terms in the trust deed: who the beneficiaries are, how the trustees may exercise their powers, what happens to income and capital, and when the trust terminates. Once assets are settled, the settlor no longer owns them (though the tax implications in the settlor's country of residence are a critical consideration — see below).

The Trustees manage the trust assets. They may be individuals (often family members, solicitors, or accountants) or professional corporate trustees (specialist fiduciary companies). Professional trustees are usually preferable for significant international trusts because they bring continuity (they do not die), experience, regulatory oversight, and expertise across multiple jurisdictions. Offshore trust companies are regulated by their local financial services authorities (the JFSC in Jersey, the GFSC in Guernsey, and CIMA in the Cayman Islands).

Trustees owe fiduciary duties — among the highest duties known to law — to the beneficiaries. They must act in the beneficiaries' best interests, avoid conflicts of interest, invest prudently, keep proper accounts, and exercise their discretion in good faith.

The Beneficiaries are those for whose benefit the trust exists. In a discretionary trust, the trustees have discretion over who among a class of beneficiaries receives income or capital, and when. In other trust types (bare trusts, interest in possession trusts), the beneficiaries' entitlements are fixed.

The Protector is a role found in many offshore trust structures. A protector (often a trusted individual or a professional — sometimes the settlor's family lawyer or a family member) holds certain reserve powers: to appoint or remove trustees, to veto distributions, or to approve changes to the trust deed. The protector role provides a check on trustee behaviour without the protector being a trustee themselves. It is not a UK domestic trust concept but is widely used in offshore structures.

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Why Internationally Mobile Families Use Trusts

Estate Planning and Succession

Assets held in trust during the settlor's lifetime are not part of the estate at death. They do not need to go through probate. The trustee continues to hold and manage the assets for the beneficiaries without interruption. For families with assets in multiple countries, avoiding multiple concurrent probate processes is a significant practical benefit.

In common-law jurisdictions, a trust can also sidestep forced heirship rules — since the assets are no longer owned by the settlor, they are not part of the dutiable estate. In civil-law jurisdictions, this is more complicated, as some countries do not recognise the trust concept and may treat the assets as still belonging to the settlor for succession purposes. Legal advice is essential for each jurisdiction where assets are held.

Protecting Assets for Future Generations

A trust can preserve family wealth across multiple generations in a structured way. Rather than distributing assets outright to beneficiaries who may be young, financially inexperienced, or vulnerable to divorce or creditor claims, a discretionary trust allows trustees to make distributions at appropriate times and in appropriate amounts, aligned with a letter of wishes from the settlor.

This intergenerational wealth transfer function is particularly valuable for globally mobile families whose beneficiaries may live in different countries and have different financial needs.

Asset Protection

Assets held in a properly constituted trust (settled before any creditor claims arise) may be beyond the reach of creditors of the settlor or beneficiaries, depending on the jurisdiction and the specific circumstances. Professional trustees in well-regarded offshore jurisdictions (Jersey, Guernsey, Cayman, BVI) can provide robust legal protection.

This is not a mechanism to defraud creditors — trusts settled with the intention of avoiding existing creditors can be set aside. But prospective planning — structuring a trust before problems arise — is legitimate.

Confidentiality

Assets held in trust do not pass through a public probate process. In most offshore jurisdictions, trust documents are not publicly filed. For HNW families who value privacy, this is a meaningful benefit compared to a will, which becomes a public document once admitted to probate.

Tax Planning

Trusts can be used for tax-efficient wealth structuring in a variety of ways, depending on the domicile and residence of the settlor and beneficiaries, the nature of the assets, and the jurisdiction of the trust.

For internationally mobile individuals not yet within the UK inheritance tax net, the excluded property trust (EPT) can be significant: non-UK assets settled into an offshore discretionary trust before the settlor becomes a UK "long-term resident" may be excluded from UK inheritance tax, potentially saving 40% on significant sums. Note that from 6 April 2025 the non-dom and deemed-domicile regimes were abolished and IHT moved to a residence basis — broadly, a person becomes a long-term resident once UK resident for 10 of the last 20 tax years — so the window for settling is now measured against that residence test, and the transitional rules are complex. Timing matters and specialist advice is essential.

For UK-domiciled settlors, discretionary trusts face IHT at settlement (if above the nil-rate band), periodic ten-year charges, and exit charges — the so-called "relevant property regime." These charges can be significant, but they may be preferable to the 40% charge that would arise on death.

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Which Assets Can Be Held in Trust?

Almost any asset can be held in trust:

• Cash and deposits
• Listed securities (shares, bonds, funds)
• Unlisted shares in private companies
• Real property (though holding real estate in trust raises additional complications in many jurisdictions)
• Life insurance policies (policies written in trust are a common IHT planning tool)
• Intellectual property
• Fine art, jewellery, and other tangible assets
• Interests in partnerships or other structures

For internationally mobile families, holding a diverse asset portfolio within a single trust governed by a well-respected offshore law (Jersey or Guernsey law are particularly stable and trust-law-friendly) provides a unified governance framework that spans multiple asset classes and jurisdictions.

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Common Trust Jurisdictions for International Families

Jersey and Guernsey are the most frequently used offshore trust jurisdictions for UK-connected families. Both have modern, well-developed trust legislation (Trusts (Jersey) Law 1984, as amended; Trusts (Guernsey) Law 2007), a deep pool of professional trustees and lawyers, and excellent bilateral relationships with the UK courts. Jersey's Foundations Law (2009) also offers a civil-law-compatible structure for families whose home countries do not recognise trusts.

Cayman Islands is widely used for larger, more complex structures — particularly those involving private equity, hedge funds, or institutional assets. The Cayman STAR trust (Special Trusts (Alternative Regime)) can be used for purpose trusts (trusts for a purpose rather than a person), useful for holding operating companies.

British Virgin Islands (BVI) is frequently used for holding company structures. A BVI company held by a Jersey or Guernsey trust is a common configuration for internationally mobile families.

Liechtenstein and Switzerland attract continental European and Middle Eastern clients; both offer strong confidentiality and stable legal frameworks. Liechtenstein's Anstalt (establishment) and Stiftung (foundation) are quasi-trust structures used by German-speaking clients.

Mauritius and Singapore serve as trust hubs for Asian and Indian Ocean clients.

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What a Trust Cannot Do

Trusts are powerful, but they are not a panacea:

• A trust settled with the intention of defrauding creditors can be set aside
• Many civil-law countries do not recognise the trust concept and may tax assets as still belonging to the settlor
• The UK anti-avoidance rules on settlor-interested trusts, transfer of assets abroad, and the relevant property regime mean that UK-domiciled settlors cannot use offshore trusts to escape UK tax entirely
• A trust that looks like a sham — where the settlor effectively retains control and the trustees exercise no genuine discretion — will be attacked by tax authorities and courts

Professional, independent trustees who genuinely exercise their discretion are essential. A trust where the settlor directs every decision is not a real trust.

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Key Questions Before Settling a Trust

Before establishing a trust, discuss the following with your advisers:

1. What is the purpose? IHT planning, asset protection, succession planning, family governance — or all of the above? The purpose shapes the structure.

2. Who are the beneficiaries? Define the class clearly. Include future children? Charities? How wide should discretion be?

3. What assets will be settled? Are there capital gains tax or stamp duty implications on transferring assets into the trust?

4. Which jurisdiction should govern? Jersey or Guernsey for UK-connected families; Cayman for larger or institutional structures; Singapore for Asian clients. Consider regulatory stability, legal infrastructure, cost, and the settlor's own connections.

5. Who will be the trustees? Professional or individual? Combination? What oversight mechanism (protector) is appropriate?

6. What are the tax implications? In every jurisdiction where the settlor and beneficiaries are resident, and where assets are held. This analysis must come before the trust is settled, not after.

7. What is the letter of wishes? This document — confidential, not legally binding — guides the trustees. It should be detailed and updated regularly.

8. What is the exit strategy? When and how will the trust ultimately be wound up or distributed?

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Costs and Ongoing Administration

Professional trustee fees vary by jurisdiction and structure but typically range from £5,000 to £30,000 or more per year for a standard offshore discretionary trust, depending on the complexity and value of the assets. Additional costs include legal fees, accounting, audit (for larger trusts), and investment management.

For trusts holding UK real estate, additional reporting obligations apply (Trust Registration Service). UK discretionary trusts face the ten-year anniversary charge and exit charge regime.

The costs are real, but for a family with a significant estate and genuine estate planning or asset protection needs, the long-term benefit typically outweighs the annual administration burden.

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How Global Investments Can Help

At Global Investments, we help internationally mobile HNW families understand whether a trust is appropriate for their circumstances, identify the optimal structure and jurisdiction, and connect them with specialist trust lawyers and professional trustees.

We provide ongoing financial planning and investment advisory services for trust assets, working alongside trustees and other professional advisers to ensure the trust serves its intended purpose across generations.

Contact us to discuss whether a trust structure is right for your family.

This guide is for general information only and does not constitute legal or tax advice. Trust law and taxation differ by jurisdiction and change over time. Always seek qualified professional advice before making any decisions. As of 2026.