The Chinese definition provides "that the settlor
, based on his faith in trustee [sic], entrusts his property rights to the trustee and allows the trustee to, according to the will of the settlor
and in the name of the trustee, administer or dispose of such property in the interest of a beneficiary or for any intended purposes." (6) The precise meaning, in this context, of the term "entrusts"--weituo--is obscure.
Where the interaction of a Settlor
with the operation of a trust may have a detrimental impact on the discretionary nature of that trust, the use of Protector in a foundation structure provides a more hands on role for those concerned about the potentially unlimited powers of Trustees to control assets.
Perhaps the most important requirement the UTDA would usher in is the need for a trustee to provide notice of his intent to decant to all "qualified beneficiaries" a term that the statute defines along with the settlor
, if living.
* The trustee must have the power to make discretionary distributions to the settlor
: Taxpayers are typically not willing to make an outright transfer of their investment assets.
results produced by the settlor
function doctrine can be understood as
In exercising these attributes, the trustee must prove himself worthy of the trust that the settlor
gave him, so that he will have to give to the property right, a use that is in accordance with the purpose for which he received the property.
courts to void trusts in which a settlor
has reserved a significant amount of control over the trust's assets.
(7) For example, in the United States, as a matter of public policy, a trust's spendthrift provision was traditionally void with respect to the settlor
's creditors where the settlor
was also a beneficiary.
Company or "settlor
" decisions are not held to a fiduciary standard and can generally be made in the discretion of the company or plan sponsor.
It should be stressed though that, aside from the tax implications, there are dangers in the Settlor
having control, especially if they are not experienced or have particular expertise in managing such affairs.
The Guernsey Foundation can be used as an alternative to the PTC and purpose trust arrangements that have traditionally been used to allow Settlors
to retain control over assets and wealth."
Holding assets in trust will also protect them if the settlor
was declared bankrupt.