A brief overview of the main parties to and responsibilities within a trust

Settlor:

Under Gibraltar law, any person or corporation capable at law of alienating to any extent assets or an interest in assets can settle assets into a trust. In settling assets into the trust the settlor transfers the legal interest in the assets to the trustees to hold upon the terms of the Trust Deed in favour of the beneficiaries.

Gibraltar discretionary trusts are usually accompanied by a memorandum or file note of wishes, which sets out the settlor's wishes with regards to the management, administration and disposition of the assets held on trust and any other matters relating to the trust.

These wishes may be changed from time to time by the settlor, but it should be noted that these wishes are not legally binding on the trustees, who are required to form their own independent views in respect of the discharge of their duties and obligations under the trust instrument.

Trustee:

The role of the trustee is to hold and deal with the assets settled into the trust in accordance with the powers given to them under the terms of the Trust Deed. It is also implicit in the exercise of any trust power that it must be exercised prudently and in good faith and for the purpose in which it was created after making the necessary enquiries.

Beneficiaries:

Any person, corporation or body can be a beneficiary under a Gibraltar discretionary trust. In order to enjoy the tax benefits afforded to a Gibraltar trust with Gibraltar trustees, no Gibraltarian or resident of Gibraltar can be made a beneficiary (nor be the settlor) of the trust. Discretionary beneficiaries have a right to have their interests considered by the trustees in the exercise of their discretionary powers.

Protector:

A protector is used in cases where the settlor wishes to empower a third party to oversee some of the actions of the trustees in order to provide the settlor with a further degree of comfort. This is often the family solicitor.

The powers of a protector are usually limited to the removal and appointment of new trustees.