Malta Trusts have gained momentum
since the enactment of the Trusts and Trustees Act in 2004. Prior to this date,
trusts were not recognised under Maltese law, since the Maltese private law is
largely based on the Civil Law tradition.
The key players in a Malta Trust
are (i) the Settlor being the person or entity settling assets on trust, (ii)
the Trustee who can be a professional trustee licensed by the MFSA or, in the
case of private family trusts, the trustee can be someone related or known to
the settlor and finally (iii) the Beneficiaries who can be named beneficiaries
or form part a class of beneficiaries. A Malta Trust also allows for the
appointment of a Protector.
Malta Trusts can be
set-up as private trusts to cater for family interests including estate
planning or for charitable purposes. Malta Trusts can have a fixed interest or
discretionary, the latter allowing the Trustee discretion in relation to the
appointment of beneficiaries and/or the extent of the benefit to which such
beneficiaries are entitled.
Malta Trusts offer an effective
and flexible instrument for estate planning since the drafting and preparation
of the trust is tailor-made to cater for the particular needs of the case at
hand. A Malta Trust can be set-up to operate inter vivos, that is, during the
lifetime of the settlor, or alternatively, as a testamentary trust that
operates causa mortis, on the incidence of the demise of the settlor. A Malta
trust may be created verbally, in writing, by operation of law or by a judicial
decision.
Malta Trusts can also be set-up
as commercial trusts and can be used in collective investment schemes and in
security offerings as security trusts. In the case of commercial trusts, a more
extensive degree of latitude and flexibility is afforded in the set up of the
trust insofar as the terms of the trust are determined from the ad hoc trust
deed which reflects the contractual agreement of the parties, whilst also
stressing the security and certainty which is required in the commercial
context. The regulation of commercial trusts is adept to the needs of the
commercial world, and has been conducive to the proliferation of trusts in this
field.
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