Effective use of trusts : a Maltese perspective

Abstract

The aim of this thesis is to try to identify the effective use that a Malta trust could be put to in the local perspective given the present legislative framework and the other competing alternatives available at law such as the limited liability company and the foundation. The thesis will analyse whether the current legislative framework is enabling the trust as a way forward or whether legislative interventions are required. Chapter 1 will introduce the Malta trust and how its features can enable one to achieve solutions that are not possible through other vehicles. Chapter 2 will give an overview of the local legislation regulating succession and how the trust cannot be used to circumvent these regulations. Discussion will continue on the effective use of the trust as against the will in specific scenarios. Chapter 3 explores the use of the trust to protect one’s assets. Although asset protection trusts are not allowed under Maltese law, a trust set up in Malta can still be structured in a way to protect assets. These features will be analysed and discussed together with an analysis of other vehicles permitted under our legislation. Chapter 4 will delve into how the provisions in the Trusts and Trustees Act enable the smooth running of the trust in commercial transactions. However as new applications are introduced, new obstacles are identified. These are analysed and recommendations for possible legislative changes are put forward. Finally, the conclusions reached from each chapter will be culminated in the last concluding chapter which brings together both the strong features of the trust but also the deficiencies arising from lacunae in the regulatory framework that are hindering the use of the trust. Suggestions for possible legislative changes are made in order to fully exploit the use of the trust in the local perspective.