Trusts can be used to protect private family wealth from foreign inheritance taxes and to ensure that a family’s estate passes from one generation to the next with minimal probate formalities and difficulties and in a way that meets the needs and desires of the family. It is important to recognise that trusts offer a most flexible way for a family to hold and to pass on their wealth; to the extent that a family wishes to ensure that the trust is operated in a Shari’a-compliant manner, the trust instrument and other supporting document should reflect that fact and, for example, set out appropriate provisions on how the trustees should invest the trust fund, or distribute assets to beneficiaries.
A number of families who wish to hold their wealth in trust, have established private family trust companies in Jersey, so that the family will have control over the actions of the trustee and, for example, ensure compliance with Shari’a principles. Private family trust companies are particularly useful where a major asset to be held within the trust structure is a family business.
For further information on Islamic Finance matters contact Trevor Norman of Volaw.