According to the Hague Convention, a Trust is a deed – inter vivos or on death – through which a person – the settlor – place under control of an individual or a company – called trustee – some assets for the benefit of a beneficiary or for a specific purpose.
There are three characteristic deemed to be essential for the existence of a Trust:
Legal ownership of the Assets: the Trustee holds the legal ownership of the Assets, but it is legally binding for him to follow the wills and rules concerned in the Trust deed;
Segregation of the assets: even if the Trustee holds the legal property, the Trust fund is separated from the Trustee’s one. Therefore, is impossible for whose are creditors of Trustee, settler or beneficiary to claim the assets in Trust.
Duty to account: The Trustee has the duty to account for his administration and he has to manage the assets in accordance with the provisions of the Trust Deed.
Usually a protector is involved. The protector is a person appointed under the trust instrument by the settlor to direct or restrain the trustees in relation to their administration of the trust.
It is possible to place any kind of assets in a Trust. This can include real estate, yachts, cars, credits, shares, bonds and even artwork.