Trust: origins and mechanisms
Read the interesting interview given by Dr. Luca del Federico.
Brief historical summary
The trust was invented by the English knights who left for the Crusades and preferred to entrust to one or two trusted people (trustee) the management of their assets to preserve them from a decay due either to bad faith or the mismanagement of family members.
From a legal point of view the possession passes from the trustee (settlor) to the manager (trustee) who must take care to distribute it to the beneficiaries only following the indications.
There may also be a protector to control the management in the interest of the beneficiaries.
The Trust responds to very different needs:
- Separation of family and business assets.
- Management of the generational transition.
- Protection of personal property from the attack of creditors.
- Management of stock option plans.
- Safeguarding property after marital separation.
- Defense of small shareholders and defense of minors.
How does the Trust work?
This simple scheme represents the set of legal relationships that bind the parties involved.
The Trust is constituted by the transfer by A (the Settlor) of its assets to B (the Trustee) to be managed in Trust for the benefit of other C (the Beneficiaries) on agreed terms. These commitments, protected by law, require the Trustee, under penalty of criminal sanctions, to take care of the goods given for the exclusive use and profit of the Beneficiaries. There may also be an address and control figure of the Trustee, D (the Protector).