Jersey: A Marriage Made In Heaven: A Foundation Acting As Trustee

Last Updated: 5 October 2015
Article by Steve Meiklejohn

Most Read Contributor in Jersey, September 2016

I recently assisted a Middle Eastern family who were desirous of creating a trust structure to hold their assets situate outside the Middle East.  The case perfectly illustrated the tension that can exist when trying to create a structure that will be both valid and robust, but at the same time will contain a number of the control mechanisms that families seek.  This family wished to abide by Sharia law in terms of the proportions the spouse and each child should receive.  The patriarch however, wanted to keep his personal and business assets in one structure and not for them to be fragmented on his death, and for the family to enjoy the advantages of having their non-UAE assets held offshore but available to them as they needed them.  Where my advice was particularly required was in relation to the degree to which the patriarch retained ultimate control over the structure.  Too much control over a structure and the robustness, or indeed validity itself, can be compromised. 

Often patriarchs will seek to achieve control through one of two ways.  Firstly, by ensure the trust instrument is drafted with little discretion being left to the trustee.  In one extreme example on which I am currently working, the settlor sought to retain the power to revoke the trust, to amend it, to add and remove beneficiaries, to hire and fire the trustee, and the protector.  On top of that, the settlor left no discretion during his lifetime to the trustee in respect of the disposition of capital.  This trust instrument, in my view, had gone too far. 

The other, less controversial and more modest way of achieving control, is through the classic purpose trust and private trust company structure; the purpose trust being the vehicle to own the shares of the private trust company.  Control can easily be provided to the settlor through providing the enforcer of the purpose trust with the power to hire and fire the trustees of the purpose trust.  It is then the trustees of the purpose trust who controls the identity of the board of the private trust company, which, of course, makes the trustee decisions.  If the settlor ultimately controls the makeup of this board, he can ensure the structure is run in the way he wishes. 

The foundation as a vehicle for private client planning is gaining in popularity.  Initially, it has been used mostly for holding vehicles such as protector companies or indeed trustee companies, but not used to act as the decision maker itself.  I do believe we will begin to see a shift in this over the next 18 months.  In the case of my recent Middle Eastern family, there is a desire to use a foundation to act as the trustee entity itself.  There are a number of attractions.  Firstly, it is simpler to understand and explain to the client because there is one level only, and not two as you have with the purpose trust/private trust company combination.  The foundation is an ownerless vehicle and therefore does not require any other vehicle or entity to own it.  Clients like this simplicity.  Secondly, the inevitable happy consequence of cutting out a level is that the structure becomes cheaper to run.  Clients like less cost; thirdly, because the foundation is corporate in nature, the way it runs appeals to clients who may have less comfort with, and understanding of, trusts.  With the single foundation route, the more opaque purpose trust is jettisoned, and the foundation trustee can operate very much like the private corporate trustee that you have with the more traditional model.  The main caveats to the use of the foundation in this way are that firstly, the lawyer needs to be comfortable that the foundation acting as trustee and charging fees is not breaching the prohibition against commercial trading, and secondly that there is still a degree of unfamiliarity with this structure, and this in itself can scare off cautious clients and advisers. 

What I believe we will see next, particularly with clients from the Middle East, is the foundation being used as the trustee of the holding vehicle for the various family assets via a family unit trust.  We have advised a Middle Eastern family on the establishment of a family unit trust.  Such a trust is attractive because the unit trust holds the assets (businesses, planes, boats, investments for instance) and the family holds specific units in the trust.  No beneficiary can say they own any portion of the assets directly, but their interest (through the units) is more tangible than that of a discretionary beneficiary, and the unit trust deed allows for units to be redeemed, and therefore for family members to leave the structure. 

In conclusion, it has often been said that structures are becoming more complex.  Equally, in the age of transparency, there is a need for simplicity in structuring where possible.  It does seem to me that using a foundation to act as trustee to the family settlements (including a unit trust) has the attraction of simplicity which clients are finding very much to their liking. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.