Thousands of entrepreneurs each year lose their homes, their savings, and their spouse or partner’s assets to boot. Such misfortune is as avoidable as it is traumatic. All too often, by the time they see us it is too late to avoid a personal bankruptcy.
A substantial number of clients call upon us to help protect their assets – from daily operational risks in their course of their trade, from frivolous lawsuits and excessive inheritance tax.
The key to asset protection lies in the separation of liabilities: personal liability, different business ventures, real estate, pension or ‘rainy-day-funds’ should all be separated. The simplest form of asset protection is a limited liability company. It can be used to separate your private assets from the risks associated with your business venture.
Depending on your needs, additional layers of protection can be added to protect your interests. For example, you can protect your company from the risks of a former sole-proprietorship or general partnership by setting up a Trust or a Private Foundation. A trust offers the possibility to separate your business assets from your private assets, and have those assets managed on behalf of a beneficiary or charity.
When you decide to set up a trust, you can benefit from all the features of this asset protection tool and the jurisdiction that it is in. You will be able to allocate your funds and assets according to your wishes.
A trust is created by a settlor who transfers some or all of his property to a trustee, who owns those trust assets legally but for the benefit of the beneficiaries. The trustee owes a fiduciary duty to the beneficiaries, who are the “beneficial” owners of the trust property. There may be a single beneficiary or multiple beneficiaries. The settlor may himself be a beneficiary. A trustee can be a natural person, or an artificial person.
We assist in setting up Trusts and Foundations in several jurisdictions.
For assets held outside the UAE we recommend in particular the Cyprus International Trust, which has very strong asset protection and confidentiality features. Our Cyprus head office is specialized in setting up trusts and management and administration of these trusts.
For assets held inside the UAE we recommend DIFC trust, ADGM trusts and ADGM Foundations. We can advise on the best vehicle and assist with drafting the trust instruments or foundation charter.