Establishment of a Trust in MaltaA ‘Trust’ is the transfer from a person, also known as the settlor, of their assets with the objective of having them managed in the interest of one or more beneficiaries. It is possible to entrust a third party with the supervision of the trust’s asset management.
The beneficiary may also be the same person as the settlor: in this case reference is to be made to a self-declared trust.
The objectives of a trustThe establishment of a trust in Malta may occur to achieve multiple objectives:
- privacy protection
- asset protection
- generational change
- asset segregation
Italy does not have a law on trusts but acknowledges trusts established in Malta, having ratified (Italian law 16 October 364) ‘The Hague Convention on the Law Applicable to Trusts and on their Recognition’ (The Hague, 1 July 1985).
Main types of Trusts in Malta
Real estate investment trust (tab)This type of trust entails the transfer of real estate assets to a trustee in order to protect one’s own assets from possible attacks of creditors.
Used as a tool to protect one’s own assets, a real estate investment trust may also be of great help during the hereditary subdivision of assets.
Corporate trust (tab)By corporate trust it is meant the conferral by a settlor to a trust of company shares in order to protect the settlor’s own assets from possible attacks of creditors. With this tool, in fact, the shares may be only attacked by those creditors that are part of the trust, but not by the creditors of the settlor.
A corporate trust is also applied in the event of generational change within companies.
Warranty trust (tab)The purpose of the establishment of this type of trust is to create separate assets guaranteed by a special certificate, which will prevent creditors of the settlor from attacking them. A warranty trust, therefore, consists of the transfer to the trust of assets of various types, from money to real estate, in order to ensure the best protection possible to one’s own assets.
Family trust and trust for disabled people (tab)The objective of a family trust is to regulate family relations, e.g., marriage crises, relations between cohabitees, generational change and successions through the transfer of assets to the trust. A trust for disabled people is used, instead, for the exercise of judicial guardianship and curatorship.
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