Maltese Trust law, based on the Trust (Jersey) Law of 1984, is regulated by the Trusts and Trustees Act, which enables both residence and non-residents to set up various types of Trusts in Malta. A Maltese trust may be set up for various reasons, such as securitization of assets, corporate financing, continuity of family businesses, succession planning, as well as real estate trusts which offer a number of advantages when it comes to dividing property between co-owners. A trust may also be used for a variety of other reasons, given that it is such a flexible tool, and may also be a simple instrument for the benefit of third party beneficiaries, such as descendants, spouses, relatives or any other person the settlor desires.
What is a Trust?
A Trust is a legal relationship created by a person (the “Settlor”) who places assets under the control of a Trustee to deal with that property for the benefit of persons (called the Beneficiaries) or for a particular purpose.
A Trust can be set up in respect of any property whatsoever – movable or immovable and situated anywhere. The assets held under trusts shall be distinct from the property of the trustee, who shall have the power and duty to administer the trust property diligently and within the terms of the trust deed. As a matter of fact, trustees shall in the execution of their duties and the exercise of their powers and discretions, act with prudence, diligence and shall observe the utmost good faith.
- Settlor is the person who intends to establish a trust.
- The Trustee is the person who shall own the property under the conditions set in the trust deed.
- The Protector shall oversee that the trust is being administered in line with the deed and the wishes of the settlor.
- Beneficiaries can be identified by name in the trust deed or they can fall under a group referred to in the deed by the settlor.
Formation of Trusts
In terms of Maltese law, a Trust can come into existence in any manner; however it is always ideal to have a written trust deed clearly delineating the functions and discretions of the trustee. The drafting and preparation of the Trust is tailor made to cater for the particular needs of the case at hand. A Trust shall continue until the 125th anniversary from the date of its creation and unless already terminated, shall then terminate.
A Trust can be set to operate inter vivos, that is during the lifetime of the settlor or, alternatively there may be a trust that operates causa mortis, on the demise of the settlor.
How can ECOVIS help you?
ECOVIS (Malta) TFC Limited is licensed by the Malta Financial Services Authority to act as trustee and may provide the following professional services:
- Advice on the set-up of a trust or foundation;
- Acting as trustee/administrator and the provision of related services;
- Accounting and maintenance of asset ledgers;
- Reporting and filing with the relevant authorities;
- Ongoing compliance.