Is a company as trustee of the trust the most “protected” structure?
Great question, and thank you to the lady who asked it. It generally depends upon the nature of the protection that you are seeking to obtain. Different structures have different benefits.
When you set up a private company you create a legal entity between you and the rest of the world. You will most likely be a shareholder and director in that company and provided that you comply with your obligations as a director, you will not be personally liable as an individual for the activities of the company. If the company is simply going to act as trustee of a trust, then it should not be used as a trading entity, and will then have minimal reporting requirements each year. Essentially a statement to say that there has been no money through the company, its not trading and therefore is solvent and able to continue to exist. You will need to check your reporting requirements with your tax advisor.
As trustee, the company becomes the public face of the trust and the fact of the existence of the trust does not need to be publicly known. A trust is one of the most private structures that you can set up. Banks and finance companies will require disclosure of the full legal structure you are using and will know the relationships, but the public won’t. A great example is a corporate trustee purchasing a property on behalf of a trust. The registered title for the property will show that the company is the owner. Anyone suing the company won’t get very far because there is no money or property in the company, it’s in the trust.
"Different structures have different benefits"
When property is held in a trust it is harder to get at. Trusts can be set up to provide the beneficiaries (the people ultimately entitled to the benefit of the trust property) with income from or distribution of the trust assets either at the discretion of the trustee or upon fixed events. Anyone wanting to get something from a beneficiary cannot access the trust property as long as it remains in the trust.
Please note that the Courts may have powers in separations and family breakups which may enable the Court to make orders accessing trust property regardless of whether or not it has been distributed. There are also circumstances where the Courts can declare that a trust exists or that in the circumstances an expectation of distribution from the trust has occurred, enabling access to the trust property.
If you are prepared to spend the money there are apparently ways to make it next to impossible for others to get at your assets. It does depend on the expertise of your advisors and how accessible you want things to be. Also consider what would happen to it all if you died tomorrow and how you would be able to pass it on to a charity or loved one.