For internationally active professionals, entrepreneurs, and high-net-worth individuals, wealth planning is no longer just about protection or tax—it’s about flexibility, continuity, and control across borders. One structure often raised in this context is the trust.
At its core, a trust is a legal arrangement designed to separate ownership from control, offering strategic benefits around succession, asset protection, privacy, and sometimes tax efficiency. But trusts are frequently misunderstood. They are not one-size-fits-all vehicles, nor are they inherently secretive or tax-driven. When structured properly—and for the right reasons—they offer robust and long-term planning advantages. When misused, they can create unnecessary cost, compliance burdens, and even risk scrutiny from tax authorities.
At Richmond Blackwood, we work with clients across Europe, Asia, the Middle East, and the Americas who are building cross-border lives and businesses. Many ask:
Does setting up a trust make sense for me?
This article offers a comprehensive, practical guide to help you answer that question. We’ll cover:
•What a trust is, and how it works
•The typical use cases: succession, protection, international structuring
•When creating a trust is appropriate—and when it isn’t
•What alternatives (like holding companies or private foundations) may be better
•And how to assess if you’re ready to take on the governance responsibility a trust requires
Whether you’re a founder monetising your first exit, a family office principal, or an independent professional with multi-jurisdictional exposure, this guide will help you make a well-informed decision.
What Is a Trust? Legal and Structural Foundations
A trust is not a company, a contract, or a financial product, it is a legal relationship governed by a deed or statute, whereby a person (the settlor) transfers assets to another party (the trustee) to be managed for the benefit of third parties (the beneficiaries). This separation between legal ownership (held by the trustee) and beneficial ownership (enjoyed by the beneficiaries) is what gives a trust its distinctive planning power.
Most modern trusts are discretionary trusts, giving trustees broad authority to manage, distribute, or preserve the trust assets according to a letter of wishes or predefined rules. In return, trustees carry significant fiduciary duties, they are legally bound to act in the best interests of the beneficiaries, with care, diligence, and accountability.
Jurisdictions such as the UK, Ireland, Singapore, Jersey, Guernsey, and the Cayman Islands offer well-developed trust laws, often rooted in English common law. These jurisdictions also provide flexibility around:
•Duration (fixed-term or perpetual)
•Confidentiality and reporting obligations
•Whether the settlor can retain certain powers (e.g. veto rights or investment oversight)
Trusts are not inherently offshore or secretive; many onshore families and businesses use them for legitimate purposes. The key is intent and transparency.
Common Use Cases for Trusts in International Planning
While the media often focuses on celebrity tax shelters or secretive offshore funds, the real-world use of trusts tends to be more pragmatic. Trusts, when structured correctly, support long-term financial and legal outcomes that are difficult to achieve with companies or personal accounts alone.
Here are five common and legitimate use cases:
1. Succession and Wealth Continuity
A trust allows a founder to separate family wealth from direct inheritance, enabling continuity without ownership fragmentation. For example, a founder of an international business may want their shares held by a trust to ensure the next generation doesn’t liquidate the company too early. By placing the company shares into a discretionary trust, the founder ensures that no single beneficiary can unilaterally dispose of their stake. The appointed trustees, who may include legal, financial, or family advisors, hold legal title to the shares and are bound to act in the best interests of all beneficiaries, often guided by a letter of wishes from the founder. This structure protects the integrity and continuity of the business, allowing it to remain under unified strategic direction while still distributing income or benefits to family members as appropriate.
2. Cross-Border Estate Planning
Trusts help navigate conflicts between civil law and common law systems, especially where heirs are spread across different jurisdictions. In countries with forced heirship rules (e.g. France, Spain), a trust may allow a greater degree of testamentary freedom.
3. Asset Protection
In litigious sectors (sectors prone to legal disputes), like finance, tech, or healthcare, a trust can shield assets from personal liability claims or future political instability, provided the transfer is not fraudulent or evasive.
4. Charitable and Legacy Goals
Trusts are often used to house philanthropic capital, enabling the settlor’s values to continue after their death. These trusts may support causes, scholarship programmes, or multi-generational giving frameworks.
5. Tax Neutrality in Certain Structures
Trusts can be tax-efficient in limited contexts, for example, in non-domiciled planning, excluded property trusts, or trusts used by non-resident settlors for offshore investments. However, tax is never the sole justification and cannot be the dominant purpose without attracting scrutiny.
When a Trust Makes Sense—And When It Doesn’t
The decision to create a trust should never be taken lightly. While trusts are powerful tools, they are not right for everyone, and a poorly conceived trust can create more problems than it solves.
When a Trust Makes Sense:
•You have multi-generational wealth or a growing international business
•You want to separate control from benefit, especially for minor or vulnerable heirs
•You anticipate cross-border succession issues
•You need asset protection from commercial risk, litigation, or geopolitical uncertainty
•You have specific legacy or philanthropic goals that outlive your direct management
•You want to consolidate ownership across jurisdictions in a neutral structure
When a Trust Doesn’t Make Sense:
•You’re seeking immediate tax advantages, trusts are not tax shelters, and misuse attracts regulatory attention
•You have insufficient assets to justify the cost and complexity—trusts come with ongoing legal, fiduciary, and administrative overhead
•You are unwilling to relinquish control—a trust requires you to give up legal ownership, and retention of too much control may nullify the structure
•You plan to use the trust to avoid public obligations—this is not only unethical but often illegal
Before establishing a trust, Richmond Blackwood recommends a structural needs analysis, weighing the trust option against alternatives such as:
•Family investment companies
•Cross-border holding structures
The right solution depends on your goals, jurisdictional profile, family dynamics, and time horizon.
Questions You Should Ask Yourself Before Creating a Trust
Trusts can be powerful tools—but only when used with intention and clarity. Before establishing one, it’s important to move beyond the allure of asset protection or tax efficiency and instead focus on whether a trust genuinely serves your broader objectives. At Richmond Blackwood, we encourage clients to reflect on the following questions:
1. What is the specific problem I am solving?
Is the goal to protect assets from future claims? To manage succession across generations? To provide for dependents with differing needs? Or to ensure business continuity? A trust must have a clear, legally sound rationale, not just an abstract desire for “protection.”
2. Who should benefit, and under what conditions?
You must define who the beneficiaries are and whether they will receive income, capital, or both. Will distributions be fixed, discretionary, or based on milestones (e.g. age, education, or marriage)? Clear intentions reduce the risk of internal family disputes or legal ambiguity later.
3. Am I willing to relinquish legal control?
Once assets are transferred to a trust, the trustees, not you, become the legal owners. If you’re not prepared to give up control, the structure may be challenged or ineffective. This is often a psychological hurdle for founders used to direct authority over their assets.
4. Where should the trust be domiciled?
The jurisdiction where the trust is established can have profound implications on regulatory oversight, tax treatment, reporting obligations, and enforceability. Some jurisdictions are better suited for privacy; others for credibility and compliance. This choice must align with your broader structuring.
5. What is the long-term governance plan?
Who will act as trustees? Will they be professionals, family members, or a combination? What happens if a trustee dies or becomes incapable? Can the trust evolve over time, and how will disagreements be resolved? A trust is only as robust as the governance framework behind it.
If these questions cannot be answered confidently, it may be a sign that another structure is more appropriate, or that more planning is needed before proceeding.
Alternatives to Trusts for International Structuring
While trusts offer distinct advantages in certain scenarios, they are not a one-size-fits-all solution. In many cases, other legal vehicles may offer greater flexibility, lower complexity, and better alignment with your strategic goals, particularly for entrepreneurs, investors, and internationally mobile families.
Here are some of the most commonly used alternatives:
1. Holding Companies
A holding company, often incorporated in a business-friendly jurisdiction such as Ireland, Luxembourg, or Singapore, can centralise the ownership of subsidiaries, real estate, or IP. This structure is often:
•Simpler to administer than a trust
•More familiar to banks, regulators, and investors
•Easier to integrate into operating businesses or financing arrangements
A holding company also allows for clear shareholder rights, dividend control, and tax-efficient structuring through double taxation treaties and group relief mechanisms.
This is especially effective when paired with nominee director services, which can be used to maintain privacy and compliance without transferring beneficial ownership. Learn more in our article: 2. Foundations
Foundations, used widely in civil law jurisdictions such as Liechtenstein or Panama, are often compared to trusts but have their own legal personality. This makes them particularly useful for:
•Philanthropy and charitable giving
•Families with succession planning objectives
•Individuals who want a structure less dependent on trustees
Foundations can own companies, receive assets, and carry out a founder’s long-term intentions, while offering a greater degree of codified governance than most common law trusts.
3. Shareholder Agreements and Will-Based Planning
Sometimes, simpler instruments suffice. In a family business, a well-drafted shareholder agreement, combined with a legally binding will or estate plan, may provide the same outcomes as a trust, without the administrative burden.
This is particularly relevant when the founder wants to retain control while alive, and direct posthumous ownership and management through a coordinated estate plan.
4. Private Trust Companies (PTCs)
If the trust model is conceptually appropriate but concerns about control or scale exist, a Private Trust Company can serve as a middle ground. A PTC acts as the trustee of one or more trusts and is owned by the family or founder, enabling strategic oversight while preserving formal legal separation.
This structure is increasingly popular with ultra-high-net-worth families, particularly in complex cross-border cases, but requires significant professional administration and cost management.
Conclusion: Clarity Before Complexity
Trusts are powerful tools, but they are also complex, heavily scrutinised, and often misunderstood. While they can provide meaningful benefits for succession planning, asset protection, or privacy, they also introduce significant legal, tax, and administrative responsibilities.
For individuals or families considering international structuring, the decision to establish a trust should never be taken lightly or based solely on generic tax advice. Instead, it should flow from a clear understanding of your long-term objectives: What are you trying to preserve? Who are you trying to protect? And what kind of control or flexibility do you need?
In many cases, simpler solutions, such as holding companies, shareholder agreements, or well-structured wills, may achieve the same goals with far less complexity. In others, a trust may be the right instrument, but only when its use is deliberate, well-planned, and fully transparent.
The key takeaway is this: structuring should never start with a tool. It should start with intent and build from there.
