Trusts: Key Considerations About This Estate and Succession Planning Tool

A trust is a legal arrangement through which a person (the settlor) transfers assets to a trustee, who manages them for the benefit of third parties (the beneficiaries) or for a specific purpose, as set out in a legal instrument known as a trust deed.

Who are the parties in a trust?

A trust is essentially composed of three elements:

• Settlor: the person who establishes the trust and transfers assets into it;

• Trustee: the person who manages the trust’s assets according to the instructions provided;

• Beneficiaries: those who will receive the benefits or assets under the terms of the trust.
  

In some structures, there may also be a protector, who supervises the trustee’s actions.

Which jurisdiction should be chosen to set up a trust?

Once the parties and structure of the trust are understood, it is important to choose the jurisdiction where it will be established. The British Virgin Islands (BVI) has been one of the leading choices, offering confidentiality and significant flexibility in both the creation and management of trusts.

BVI Advantage for Fiduciary Structures: the VISTA Trust

One of the main advantages of trusts in the BVI is their usefulness as estate planning tools and the possibility of establishing a unique type of trust: the VISTA (Virgin Islands Special Trusts Act Trust).

By transferring assets into a trust, probate proceedings and potential family disputes are avoided, allowing a smoother, more efficient, and confidential transfer of wealth. The structure also allows for the segregation of assets from the settlor’s personal estate, providing greater security in scenarios of legal uncertainty, regulatory risk, or creditor exposure.

The VISTA, in particular, was designed to allow trustees to hold and retain shares in BVI holding companies without the obligation to intervene in the management of the underlying company. This makes it a valuable option for estate structures in which the settlor wishes to keep company operations and control in the hands of designated managers or directors, while the assets remain protected within the fiduciary structure.

When to use a VISTA Trust?

A VISTA Trust is ideal for:

• Family or holding companies;

• Multi-generational succession planning;

• Structures where the settlor wishes to retain indirect control of the company;

• Situations combining asset protection with business continuity.
  

Aurora is a licensed registered agent in the British Virgin Islands, specializing in the incorporation and support of fiduciary structures. With a presence both in the BVI and in São Paulo, Aurora provides full support for the structuring of trusts.