Trust and capital fund
What this is about
A trust is an asset protection instrument in which a person (the settlor) assigns the ownership of a part of his or her assets to a trustee, who manages them in the interest of the beneficiaries and for the one and only purpose determined by the settlor. The effect of this institution is to segregate the assets established in trust, which becomes unassailable by both the settlor’s and the trustee’s creditors.
A capital fund is a special type of agreement whereby certain assets are set aside to meet specific needs of the family. Given the restriction placed on the assets included in the fund, these assets can only be claimed by creditors of the family: this means that if the creditor knows that the debt has nothing to do with the needs of the family, he has no claim on the assets of the fund.
The role of the notary
In the context of acts aimed at protecting assets, the notary acts as a wealth advisor, providing a consultancy service aimed at showing families the most suitable solutions for their needs. His role is of great importance.
- A trust is drawn up as a public deed, through a notarial deed, especially if the object of the trust is real estate and/or company shareholdings.
- A capital fund is established by way of the signing of a public deed before a notary in the presence of two witnesses, which will be noted in the margin of the marriage certificate and recorded in the Land Registry.
- Finally, in both cases, the advice of a notary can be useful in evaluating the advantages and disadvantages of one or the other institution.
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