<p><span lang="EN-US">Today we will talk about the desire and ability of clients to manage trust, namely, about the client’s control over the assets transferred to the trust.</span></p><p><span lang="EN-US">Let's start with the main: Discretionary Trust does not provide for your asset management trust! In essence, the discretion of the trust is the broad powers that a trust company has over trust assets.<br /> <br /> That is why the law on CFC (Controlled Foreign Corporation) was introduced the item that only discretionary trusts are not controlled. Of course, all decisions regarding the management of trust assets when managing a discretionary trust are taken by trustee.<br /> <br /> Remember the other provisions of the CFC. The trust is not a CFC. If the trust is irrevocable, and upon expiration of the trust assets are not returned to the settlor, then the activities of the trust are not controlled by the settlor and the settlor does not participate in the distribution of income among the beneficiaries. Let me remind you that the same requirements are related to the Trust Protecor. If the Protector monitors all actions of the trust, then he is the controlling person.<br /> <br /> The previous paragraph is necessary to avoid needless illusions.<br /> <br /> Also you need to remember about the automatic exchange of tax information. In the part of trusts, if you opened an account in a bank (which is not necessary by the way) or otherwise showed a trust agreement to the bank (and you allowed to copy it or sent an e-mail) or to another exchange entity, information on the structure of the trust will be is visible in the Russian Federation or in another country to the participant in this exchange.<br /> <br /> The most interesting moment is the case when funds are transferred to the trust for stockbroking with securities or crypto currency. In this case, the settlor of trust wants to have the opportunity to manage the money quickly, and in some cases, have full access to them.<br /> <br /> Quote the</span><span lang="EN-US"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></span><span lang="EN-US">Discretionary Trust Clause: "Trustees have the absolute right, hire to manage the assets of the trust, any third party companies and individuals who can be transferred all or part of the property or other assets to the management, on the terms that the trustees deem appropriate".<br /> <br /> There are <span style="text-decoration: underline;">two basic ways</span> to control assets partially:</span></p><p><span lang="EN-US"><span>1.<span>     </span></span></span><span lang="EN-US">The trust agreement special conditions listed. In these conditions, a mechanism for working through exchanges, commands for the trust company, obtaining consent of the protectors, etc. is provided. For example, a client makes a request to place funds there urgently, or to buy something, at the same time he connects the protectors who give consent. Trust company executes such a request. In so doing an e-mail from the client, has the power of a notarized document, as provided for by the trust. Risk of loss of assets is not borne by the trustee or protectors.<br /> I draw your attention to the fact that "special conditions" are an attachment to the trust and may not be shown to outside parties, since they are internal regulations, between the trustee and the settlor.</span></p><p><span lang="EN-US"><span>2.<span>     </span></span></span><span lang="EN-US">The settlor has created or creates a separate management company (broker), in which the trust company for five banking days lists the assets of the trust that is registered in the trust. The presence of a management company or a third-party broker or adviser is permitted by the trust. However, such a management company is obliged to report regularly on operations with the trust fund to the trust company and, at the first request, to return the assets to the trust company, the management company bank must be notified of this and give its consent to the refund under certain conditions.<br /> If a management company is established in a foreign jurisdiction, the settlor may be required to declare it as a controlled company in the Russian Federation in terms of its revenues as a broker rather than the yield of the trust, which allows it to reduce its profitability by increasing the yield of the trust.</span></p><p><span lang="EN-US"> </span></p><p><span lang="EN-US"></span><span lang="EN-US">In addition to these methods, there are instances when management companies (financial assets or real estate) are under control of the settlor of trust. This control can be hidden, but effective.</span></p><p><span lang="EN-US">Anyway, it is necessary to create clear mechanisms for the urgent return of funds when transferring asset management in the event of the settlor's death, for distribution to the beneficiaries.<br /> <br /> When creating a trust, it is necessary to take into account all your wishes, the existence of legislation and other factors, for example sanctions, or "special treatment of Russians (Ukrainians, Belarusians, etc.)".<br /> <br /> A risk insurance mechanism is always needed, and the insurance policy is transferred to the trust company, but not always it is economically justified.<br /> <br /> In any case, you need to start with a <em>consultation</em>.<br /> <br /> And once again I draw your attention to the fact that changing your tax residency from Russian Federation to European one, you become a tax resident of that country, with all the ensuing consequences. Including, and for the formation of trust agreements. In this regard, it is more beneficial to use more interesting tax jurisdictions in Asian jurisdictions, such as Singapore.</span></p>