The concept of ‘family trust’ was recently introduced into the Maltese trust regulatory framework pursuant to the publication of the Trusts and Trustees (Amendment) Act on 25 April 2014.
The “family trust” is an instrument which allows the setting up of a trust to hold property of a settlor for the present and future needs of family members, or dependants who are related to the settlor of the trust, and who are definite and can be ascertained on the creation of the trust. In practice, the individual wishing to create the “family trust” (i.e. the settlor) sets up a company, which will act as trustee of the family estate transferred to it under trust, for the benefit of the family members.
It is yet another instrument available for those interested in Malta as a wealth management centre.
The Trusts and Trustees (Amendment) Act included other amendments to the Trust and Trustees Act (Cap. 331, laws of Malta) such as:
– the perpetuity period applicable to trusts is now extended to 125 years;
– the setting out of specific circumstances in which a settlor may reserve powers under the terms of the trust;
– the introduction of an ‘Enforcer’ in charitable trusts; and
– the introduction of the duty of auditors of a trustee to report to MFSA issues or facts which the auditor may become aware of in his capacity of auditor, including any facts which could lead to a serious qualification in the auditor’s report or which constitutes a material breach of the legal and regulatory requirements applicable to trustees.
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