The trust company: advantages and costs

The trust company: advantages and costs

The trust is increasingly becoming a tool, an alternative to the patrimonial fund, aimed at safeguarding the assets of the family or business from the adversities of life: let’s see here what it is and how it works.

The term Trust is usually translated with the term trust and trust.

We have a trust when a subject, which we define the Settlor , decides unilaterally to undress, for a certain period of time, all or some of its assets, and / or rights, transferring them to a third party, the Trustee , for the benefit of some subjects, the beneficiaries , who may also be the children, the spouse or the descendants, for the achievement of an aim worthy of protection from our legal system.

The trust finds its birth in the Anglo – Saxon countries and has slowly evolved into increasingly articulated forms in various jurisdictions.

In Italy, the trust institution was not unknown. In fact, already in 1899, the Court of Cassation had posed a problem concerning a fedecommesso relating to the real estate of an English citizen, located in Sardinia.

Currently, the internal legal recognition of the trust derives from the ratification, by our country, of the Hague Convention of 18 July 1985 concerning the law applicable to trusts and their recognition.

The Convention states that ” trust refers to the legal relations established by a person with deed between living or mortis causa if the assets have been placed under the control of a trustee in the interest of a beneficiary or for a determined purpose “.

The creation of a Trust Company

In relation to how to establish trust, they are very simple. The only requirement required is the written form.

In Italy, the practice is to make authenticate the act establishing by a notary or (in other cases where the form is useful that it is supported by a more rigorous procedure, eg. In the trust where there are beneficiaries which are also weak subjects ) to proceed with the public deed.

It should be remembered that one thing is the establishment of a trust , that is, the act that contains the rules, the appointment of the trustee and the beneficiaries (if already existing), the other is the act of transferring the assets that will serve to the trustee to put in place the program defined and wanted by the settlor.

Essential features

Postponing the explanation of how the trust works in a few lines later, we can anticipate that the elements characterizing the trust are the following:

1) trust assets constitute a distinct mass and are not part of the trustee’s assets;

2) the trust property is held by the trustee   or another person on behalf of the trustee;

3) the trustee is invested with the power and charged with the obligation, of which he must report, to administer, manage or dispose of the assets in accordance with the provisions of the trust;

4) the settlor may retain certain rights and faculties.

As can be seen, therefore, the Convention does not give a definition of trust but underlines what those elements and those minimal and essential behaviors are. But every trust must have rules that govern both its operation, the duties of the trustee, and its replacement, and so on.

The regulatory law

This reflection allows us to deal with the subject of regulatory law.

The Convention states that  the trust is governed by the law chosen by the settlor and if a law does not know the trust the law with which it has closer links, close links that must be understood the place of administration of the trust or the law location of the property, or the residence or domicile of the trustee or, in relation to the purpose, the place where it is to be built.

Protection from creditors and legitimates

Is it possible to confer trust property in disregard for creditors and legitimate rights?

The answer is obviously negative. The Convention punctually provides for the prohibition of setting up trusts that are harmful to the rules on the necessary succession, on the protection of creditors in the event of insolvency.

How the Trust works

– The assets are transferred from the settlor to the trustee (placed under his control) and constitute the trust fund.

– Trust property is separated from the trustee’s personal assets and is not part of his property regime or his succession (so they are not transferred to the trustee’s heirs).

– The trustee’s personal creditors cannot assault the trust fund assets.

– The trustee is invested with power and charged with the obligation, which he must report, to administer, manage or dispose of the assets according to the terms of the trust and the particular rules imposed by law.

  • Trust property is ” segregated ” and therefore not subject to the claims of:

a) personal creditors of the trustee since they are not part of his matrimonial or inheritance property regime;

b) creditors of the settlor, because they are no longer part of its assets (except for the hypothesis of ordinary and bankruptcy revocatoria);

c) creditors of the beneficiaries until they receive such assets from the trustee.

The beneficiaries

There are various types of beneficiaries: beneficiaries of income and beneficiaries of the Fund.

The beneficiaries of the income are those who can be the object of income attributions (for example, the property transferred to the trust is leased and tax paid: what remains if so desired and envisaged by the settlor can be transferred to the beneficiary). These beneficiaries may or may not coincide with the beneficiaries of the Fund.

The beneficiaries of the Fund are those to whom, after the final term of the trust, the assets will be transferred.

They, in turn, are divided into vested beneficiaries, that is, with a position that is questioned, and contingent beneficiaries, that is, with positions that are not yet quesed. This means that the vested beneficiaries are those already identified in the act, while the contingent beneficiaries are those that, although identified, are subject to a suspensive condition, for example, they must be alive at the final term of the trust.

These distinctions, if not correctly understood, identified and foreseen in the act, can create effects that are completely deleterious and contrary to the will of the settlor.

When it is convenient to create a trust

Frequent applications of the trust can be found in the generational passage of the assets or shares of companies , the protection of the weak , in the protection of situations in fact such as cohabitation , in the planning and arrangement of patrimonial and income interests of the family , or with a function of guarantee instead of guarantees .

The belief that, in order to make a trust, it is necessary to have big assets: there are trusts that have negligible values whose true heart is not what it contains, but the purpose that we want to protect.


Costs are divided into three areas:

The cost of institution:: will depend on the fee agreement that is reached with the professional who draws up the trust deed.

The cost of transfer of goods: depends on the type of goods and the type of beneficiary. For example, if a parent transfers assets to the benefit of a beneficiary who is the child, the rules on succession and donation will apply (inappropriately, establishing a trust does not mean naming an heir or making a donation), with a deductible of 1 million euros for each beneficiary, paying only 3% of the tax charges.

The cost of taxes due during the life of the trust (we always assume, for example, that there is a leased property) are governed by the single text on income taxes.