Structuring

Trusts & foundations

A trust and a foundation solve the same problems: orderly succession, protection from forced heirship and creditors, and a durable holding vehicle. But they are not interchangeable. Which one is recognised and taxed sensibly depends entirely on where the family, the assets and the beneficiaries sit. Arrive is a boutique advisory firm. We do not act as trustee, and we do not give legal or tax opinions ourselves. We shortlist the structure and jurisdiction, project-manage the formation through licensed providers we have vetted, and make sure the reserved-powers, firewall, CRS-reporting and US-beneficiary questions are answered by qualified counsel before anything is settled.

Last verified July 2026

What this covers

We map the family's objectives, whether that means succession, asset protection or pure holding, against the trust-versus-foundation choice. Then we shortlist jurisdictions, for example Jersey, Guernsey, Cayman, BVI or a Cyprus International Trust for trusts, or a Liechtenstein Stiftung, Panama private-interest, Jersey or Nevis foundation for a civil-law legal person.
We coordinate formation through independent, licensed trustees, fiduciaries and foundation service providers we have vetted. We arrange and manage the process. We do not act as trustee or foundation council ourselves.
We commission independent legal opinions in every relevant place: the trust's situs, the settlor's domicile and each beneficiary's residence. These cover validity, the firewall provisions and cross-border recognition. We do not rely on a single provider's marketing.
We structure reserved powers and protector roles so the settlor keeps the influence they intend. That can mean investment direction, the power to appoint and remove trustees or beneficiaries, or the ability to change the governing law. The line we watch is control. Keep too much of it and the trust can later be attacked as a sham.
We set up CRS and beneficial-ownership-register reporting from day one. The starting point is that settlor, trustee, protector and beneficiaries are all treated as reportable Controlling Persons of a trust.
We identify any US-connected settlor or beneficiary at the outset and refer them to US tax counsel for the throwback rules and Forms 3520 / 3520-A, before any assets move. A badly sequenced settlement is expensive to unwind.
We prepare the documents and mechanics around the trust: the letter of wishes, the funding route (including the blocked-account capital confirmation a Liechtenstein foundation requires), and the succession plan for protector or council members.
We decline the work, and we say so plainly, when the aim is to defeat existing or foreseeable creditors, evade tax or sidestep reporting. Structures built for that purpose do not survive scrutiny. We will not build them.

Scope & conditions

Hague Trusts Convention 1985: 14 contracting parties as of 2026 (confirm); the United States signed on 13 June 1988 and France signed, but neither has ratified, so the Convention is not in force there. In civil-law countries that are not parties, recognition of a foreign trust turns on domestic private international law, not the treaty.
Jersey / Guernsey trusts: Article 9 of the Trusts (Jersey) Law 1984 is the firewall: validity, administration and the transfer of assets are governed by Jersey law, and foreign heirship, matrimonial and personal-relationship claims are disregarded. Article 9A permits a settlor to reserve powers (revoke/vary, appoint or remove trustee/protector/beneficiary, change proper law). Guernsey's Trusts (Guernsey) Law 2007 mirrors this.
Cayman & BVI trusts: Cayman STAR trusts sit in Part VIII of the Trusts Act (originally the Special Trusts (Alternative Regime) Act 1997); BVI VISTA trusts under the Virgin Islands Special Trusts Act 2003 let a trustee hold company shares while the directors run the business. Both jurisdictions have statutory firewall and reserved-powers provisions insulating the trust from foreign forced-heirship law.
Liechtenstein Stiftung: Minimum capital CHF 30,000, fully paid up on formation; foundation council of at least two members; a one-off establishment levy of 0.2% of capital; 12.5% profits tax with a CHF 1,800 annual minimum (as of 2026; confirm). Private-benefit (family) foundations are distinguished from charitable ones.
Panama private-interest foundation: Governed by Law 25 of 1995; minimum patrimony of USD 10,000; a foundation council of three natural persons or one legal entity; council members' names appear in the public charter. Annual maintenance is a fixed fee in the region of USD 400 (as of 2026; confirm).
Nevis foundation / trust: Multiform Foundations Ordinance 2004 (in force 2005) plus strong asset-protection features: a foreign judgment is not directly enforceable, a creditor must re-litigate in Nevis under Nevis law, and security of the order of US$100,000 may be required to bring a claim (confirm current figure).
Cyprus International Trust: International Trusts Law 69(I)/1992, substantially amended in 2012: neither settlor nor beneficiaries may be Cyprus-resident in the year before creation; a statutory firewall overrides foreign forced-heirship rules; and the settlor may reserve wide powers (including revocation, investment direction and change of governing law) without invalidating the trust.

How it works

You need full verification of source of wealth and source of funds, along with KYC on the settlor, the protector and the beneficiaries. Licensed fiduciaries will not proceed without it. A thin file will undermine the structure later.
Solvency matters at the moment of settlement. Firewall and asset-protection statutes work prospectively, not retroactively. If you transfer assets when a claim is already underway or foreseeable, the settlement can face a fraudulent-transfer challenge. That defeats the whole purpose.
Before any assets move, you need a tax-residence analysis of everyone connected to the structure: the settlor, the protector and each beneficiary. A single US person, or a beneficiary living in a high-tax country, can change the entire tax outcome.
Control requires a deliberate choice. Reserved powers, a protector, or a foundation council can all work, but they need to be documented properly. The goal is to preserve the settlor's intended influence without tipping the structure into looking like a sham or a mere agency arrangement.
Reporting should be set up from the start. That means CRS exchange of settlor, protector and beneficiary data, along with any required beneficial-ownership register filing. The family should understand that the structure is transparent to tax authorities. It is not transparent to the public.
Funding mechanics need to be arranged in advance. For a Liechtenstein Stiftung, the CHF 30,000 must be paid into a blocked account with a bank in Liechtenstein, Switzerland or the EEA, against a confirmation certificate, before registration.

What can go wrong

Reserved powers cut both ways. Jersey, Cayman, BVI and Cyprus law all expressly permit a settlor to reserve investment direction or the power to remove trustees. But a settlor who in substance keeps control of everything risks having the trust set aside as a sham, or treated as tax-transparent. The firewall does not save a structure a court decides is not a real trust.
US beneficiaries are the single most common and costly trap. A foreign non-grantor trust that accumulates income triggers the throwback rules. That means a compounding interest charge on later distributions of that accumulated income, one that can approach or even exceed the income itself. Form 3520 and Form 3520-A carry penalties too, starting at $10,000 and running as high as 35% of unreported transfers or distributions.
The firewall protects the trust in the courts of its own jurisdiction. It does not stop a court in the beneficiary's or settlor's home country from ruling against that person personally, ordering repatriation, or reducing a forced heir's claim against other assets. Whether the protection is real depends on where the assets, and the people, actually are.
CRS ends banking secrecy for these structures. Settlor, trustee, protector and beneficiaries are all reportable. A settlor is reported whether the trust is revocable or irrevocable. A discretionary beneficiary becomes reportable in any period a distribution is made. A structure sold on confidentiality from tax authorities is mis-sold.
Recognition is not guaranteed in civil-law countries that never ratified the Hague Convention. A common-law trust may be recharacterised or ignored there. This is a large part of why a civil-law foundation, which is a legal person in its own right, is often the sounder choice for a family domiciled in continental Europe or Latin America.

Frequently asked

Trust or foundation. Which should I use?

It depends on legal culture as much as on the assets themselves. A trust is a common-law relationship. The trustee holds legal title for beneficiaries, and the structure is flexible and well understood in Jersey, Guernsey, Cayman, the BVI and Cyprus. A foundation, whether a Liechtenstein Stiftung, a Panama private-interest foundation, or a Nevis or Jersey foundation, is different. It is a separate legal person that owns its own assets, and civil-law and Sharia-influenced jurisdictions recognise that far more comfortably than a trust. If the family is domiciled in continental Europe, Latin America or the Gulf, a foundation is often the safer bet for recognition. If the setting is common-law, a trust usually gives more flexibility. We shortlist against your specific residences and objectives rather than defaulting to one.

Can I keep control of the assets after I settle them?

To a degree, and lawfully. The reserved-powers regimes in Jersey (Article 9A), the BVI, Cayman and Cyprus let a settlor keep or grant certain powers. These include directing investments, appointing and removing trustees, protectors or beneficiaries, and changing the governing law, all without invalidating the trust. A foundation works differently. You set the purpose and appoint the council. The limit in both cases is substance. If you effectively retain control of everything, a court can find the structure a sham or treat it as tax-transparent. That means losing the protection you paid for. The real design task is to give you the influence you actually need, and no more.

Will a trust or foundation defeat forced heirship?

Inside the structure's own jurisdiction, generally yes. Firewall statutes, including Article 9 of the Trusts (Jersey) Law 1984 and equivalents in Cayman, the BVI and the Cyprus International Trusts Law, provide that validity and the transfer of assets are governed by local law. Foreign heirship rights are disregarded under these statutes. A Jersey court will not enforce a foreign judgment that failed to apply Jersey law. But a forced heir can still pursue the settlor or the estate in the home country. Assets or beneficiaries physically located there remain exposed. The protection is strong where the assets and people are offshore, and weaker where they are not.

Is any of this still confidential now that CRS exists?

It is private from the public, not from tax authorities. Under the Common Reporting Standard, the settlor, trustee, protector and the beneficiaries of a trust are all treated as Controlling Persons. That makes them reportable. The settlor is reported whether the trust is revocable or irrevocable. The protector is reported regardless of whether they exercise control. A discretionary beneficiary becomes reportable in any year they receive a distribution. Many jurisdictions also maintain beneficial-ownership registers. Anyone selling one of these structures on the promise of invisibility to your tax office is selling something that no longer exists.

I have a US citizen or resident in the family. Does that change things?

Substantially, and it is the first thing to check. A US person treated as the owner of a foreign trust must ensure Form 3520-A is filed. That is due the 15th day of the third month after the trust's year-end, so 15 March for a calendar-year trust. US persons also file Form 3520 for transfers, distributions and large foreign gifts, due the 15th day of the fourth month. A US beneficiary of a foreign non-grantor trust faces something called the throwback regime. Under it, accumulated income distributed in later years is taxed, plus a compounding interest charge that can be punitive. Penalties for late or missing forms start at $10,000 and can reach 35% of the amounts involved. We flag US-connected persons before anything is settled and route the analysis to US tax counsel. We do not give US tax advice ourselves.

What does it cost and how long does it take?

We do not quote a house price, because the honest figure depends on jurisdiction, the licensed trustee or foundation provider, the complexity of the assets and the legal opinions required, and quoting a fixed number before that is known would be misleading. Some inputs are fixed by statute. A Liechtenstein foundation, for example, requires a CHF 30,000 minimum capital and a 0.2% establishment levy. Panama sets a USD 10,000 minimum patrimony. The advisory and fiduciary fees are not fixed in the same way. We scope the specific structure with you and obtain firm quotes from the vetted providers before you commit. Timelines are typically weeks rather than days once KYC and funding are in order.

Need trusts & foundations done properly?

One named person on your file, and an honest answer on scope, timeline and cost.