In virtue of the powers conferred by Article 57 (1) of the
Trusts and Trustees Act, Chapter 331 of the Laws of Malta
(hereinafter referred to as 'the Act'), the Minister of
Finance, acting on the advice of the Malta Financial Services
Authority (hereinafter referred to as 'the MFSA'), has
recently promulgated the Trusts and Trustees Act (Protected
Disability Trusts) Regulations (hereinafter referred to as 'the
The Regulations were promulgated in virtue of Legal Notice 324
of 2016 and published on the Government Gazette on the 7th of
The purpose of the Regulations is to regulate the establishment
and administration of Trusts formed for the benefit of
Beneficiaries at least one of whom is a person with disability,
the person with disability benefits
exclusively from the Trust assets; or
the parents of the person with
disability are the preferred Beneficiaries during their lifetime,
and following their demise, the person with disability shall be the
sole Beneficiary under the Trust.
Such trusts are to be known as Protected Disability Trusts.
A 'Protected Disability Trust' shall:
need to be set up by a family member
of the person with disability; and
be for the benefit of a Beneficiary
who is a person with disability, as explained hereunder; and
is notified to the MFSA.
A 'person with disability' shall mean:
a person, being over compulsory
school age, who, by reason of injury, disease, congenital deformity
or other physical or mental incapacity, is substantially
handicapped in obtaining or keeping employment or in undertaking
work on his own account, of a kind which apart from that injury,
disease, deformity or incapacity would be suited to his age,
experience and qualifications; or
a qualified person with a disability
as defined in the Equal Opportunities (Persons with Disability)
a child certified to be suffering
from physical and, or mental disability by the Medical Panel
responsible to establish whether a child would be deemed eligible
for a Disabled Child Allowance.
During the lifetime of the person with disability, the Trustee
shall act and administer the Trust assets in the paramount interest
of such person with disability, and where the Trust assets include
immovable property which constitutes the primary place of residence
of the person with disability, such immovable property shall not be
disposed of while the person with disability is still alive, except
the prior written consent of the
confirmation from the Court that such
disposal is in the interest of such person with disability.
A Protected Disability Trust shall have as its Trustee:
a duly authorised Professional
Trustee, who is either not remunerated or remunerated as explained
a Private Trustee;
in accordance with the Act, and such Trustee shall not also be a
Beneficiary under the same Trust.
Where a Professional Trustee is remunerated, the applicable fee
shall be agreed upon with the Settlor and clearly set out in the
Trust Instrument, and shall not exceed the amount of Euro 400 per
year, or such other amount which shall reflect changes in the cost
of living. The imposed fee shall be fixed for a period of 3 years,
and any increase shall be proportionate to the increase in the
index of inflation. This limit shall only apply in cases where the
initial and additional settlement to the Trust do not cumulatively
exceed the value of Euro 450,000.
The Trustee, in addition to the duties imposed on the Trustee
under the Act and the Trust Instrument, shall have the following
open and maintain bank accounts in
the name of the Trustee and by reference to the name of the Trust
for holding cash relating to the Trust;
seek to generate income from assets
held on trust by investing monies in accordance with the
Regulations or leasing property when deemed to be in the interest
of the person with disability.
When setting up a Protected Disability Trust, a Protector shall
be appointed in all cases, and the Protector's powers shall be
exercisable and come into effect not later than the date when the
person with disability becomes the sole Beneficiary. The Protector
shall have no actual or potential interest in the present or future
Trust assets. The Trustee shall obtain the consent of the Protector
prior to the:
resignation of the Trustee; and
transfer of assets from the
Moreover, the Protector shall always be consulted before the
Trustee takes decisions relating to:
distribution of income or
the medical and educational needs and
the care of the person with disability.
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.
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