Trustee Services

Beach Cover A trust is a legal arrangement whereby an individual, the "settlor", transfers property to another, the "trustee", for the benefit of a third person, the "beneficiary", who may also be the settlor.

A trust can take many forms, such as discretionary trusts, in which the trustees have full discretion as to how income and/or capital is to be distributed to the beneficiaries. This contrasts with trusts in which the distribution of income or capital is strictly defined in the Deed of Trust.

Trusts can be revocable or irrevocable; the difference being that under a revocable trust, the settlor may effectively claim back the assets. But in such a case, the settlor would be viewed as having control over the trust, making it more difficult to use for tax savings or asset preservation. Ordinarily, the key is to ensure that the maximum level of control over assets is placed outside the hands of the settlor and thus outside the jurisdiction of the settlor's country of residence.

This gives rise to a potential problem because many settlors are concerned about their inability to control assets in such circumstances. Hence the true nature of the trust: One must have "trust" or faith, in both the structure as well as in the chosen trustees. Certain methods have been devised to provide settlors with some degree of influence via a "protector", usually an attorney or trusted individual who stands between the trustees and the settlor, or by a "Memorandum of Wishes" from the settlor outlining the settlor's intent under various circumstances.

The Trust is a very versatile legal vehicle which can be used for lifetime management and/or post-death management and disposition of the settlor's estate.

As a lifetime management tool, trusts are generally established for the following reasons:-

  • estate planning;
  • asset structuring and centralising;
  • international investment;
  • tax planning;
  • flight capital;
  • avoiding disruption on death;
  • protection from potential creditors;
  • flexibility.

As a post-death management and disposition tool, trusts can be established for the following reasons:-

  • to provide for minors;
  • to distribute assets to beneficiaries;
  • to protect beneficiaries;
  • to care for individuals vis-a-vis secret relationships;
  • to avoid public probate;
  • confidentiality;
  • to protect the weak;
  • preserving the family fortune;
  • continuing the family business.

Trust and Company Combination

A frequently used arrangement is to form a combined trust and private investment company. Investment assets are owned by the Company and the shares of the Company are owned by the trust. The Settlor designates the trust beneficiaries, which may include the settlor himself.

This arrangement is particularly advantageous for the following reasons:-

  1. continuity of responsible management after death of the Settlor of the Trust as the Trust instrument can provide for the continuing operations of the company;
  2. since the shares of the company are owned by the Trust, legal ownership of the company and its underlying assets may be completely removed from the customer thus preserving privacy and anonymity. The Trust instrument acts as a substitute for a Will, providing instruments with respect to the company subsequent to the death of the owner and therefore avoiding public disclosure of the owner's name.


Clients from civil law countries that are uncomfortable with the concept of a Trust may opt to form a Foundation, with which they are more familiar. Unlike a Trust, the Foundation is a separate legal entity and is the owner of the foundation property transferred by the Founder. The constitution of a Foundation is similar to that of a corporate structure, however, a Foundation’s purposes are basically the same as a Trust. The legislation governing Foundations in the Bahamas was passed in 2004 and Guaranty Trust Bank Limited can assist in the formation of the foundation as well as the management of its property.

Custodian Services

Securities in trust client portfolios are normally held in safe keeping by agents abroad so that they are readily available for quick trading and delivery. Securities can also be purchased in the name of a nominee company to provide anonymity for the beneficial owner.