Understanding DIFC Trusts

Selecting an appropriate jurisdiction is crucial, as it determines the regulatory framework, level of asset protection, confidentiality, and tax treatment, influencing the overall effectiveness of the trust.

The DIFC as a jurisdiction offers a robust legal framework for the establishment and administration of trusts, providing families and wealth managers with a sophisticated tool for asset protection, estate planning, and succession management. The DIFC Trust Law has been widely recognised by leading practitioners and academics as one of the best globally and, as a consequence, offers strong asset protection features, also safeguarding trust assets from creditors’ claims and legal disputes. In addition, the DIFC’s privacy framework also ensures high levels of confidentiality, protecting the privacy of the settlor and beneficiaries.

Trusts subject to DIFC law are created by any one of the following methods: (i) the transfer of property to another person as trustee during the settlor’s lifetime, or by will or other disposition taking effect upon the settlor’s death, (ii) by the transfer of property from one trust to another, (iii) by declaration by the owner of identifiable property that he or she is holding the property as trustee, (iv) by the exercise of a power of appointment to do so in favour of a trustee, or (v) by way of an instrument in writing including a will or codicil. Most importantly, DIFC trusts are not registered in the DIFC and no register of trusts is kept in the DIFC.....

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Source DIFC