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Conference on International Use of Trusts

Conference on International Use of Trusts. Wilmington Delaware 2 December 2009 Willem J.L. Calkoen NautaDutilh N.V. Trusts. Understanding of civil code continentals split legal ownership and beneficial rights. Use of Trusts internationally. 20 years ago: hide assets

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Conference on International Use of Trusts

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  1. Conference on International Use of Trusts Wilmington Delaware 2 December 2009 Willem J.L. Calkoen NautaDutilh N.V.

  2. Trusts Understanding of civil code continentals split legal ownership and beneficial rights

  3. Use of Trusts internationally • 20 years ago: hide assets • Now: very rich > 500 mio complicated schemes put assets in trust for 20 years depart from ownership for 20 years TRUST then to next generation • Also: asset protection sometimes optional in country A or B, e.g. World War II Shell, Philips, Unilever also rich individuals

  4. Atmosphere around Trusts Tax inspectors in continental Europe mistrust Trusts. They think: tax evasion. Channel Islands, Caiman: all suspect e.g. European directive against trusts (money laundering). Maybe: Delaware more trustworthy. NB: to be trustworthy Jersey has (as common law country) copied civil law foundations.

  5. Hague Treaty on Trusts All member countries accept Trusts. Only 12 ratified, including UK, Canada, Northern Ireland, Netherlands, Switzerland etc. Why not US?

  6. Trusts: families ↔ financings Trusts are used in rich family structures. Also: Financings: trust bundles debenture holders rights The advising worlds: family ↔ finance are not close enough to each other.

  7. Problem for Dutch families Transfer assets from parent to trust can be taxed as gift to third party: 68%. Many parents move to Monte Carlo or UK for 10 years. After that no gift tax.

  8. Examples: splitting + corporate structure • Ikea put assets in foundation, he on board of foundation. Sons beneficial: split management / ownership. 2. General Trust Japan person 0% No dividend tax

  9. Trusts in Business • Financing: bundling interests of debentures. • Aircraft financings: Irish trusts. • Sale lease back: investors participation in trust which owns power plant. • Put golden share in trust. Trustee votes.

  10. Business use of foundations (1) Could have been Trusts • Keep landing rights Board friendly to Air France Air France Foundation KLM

  11. Business use of foundations (2) • Protection device friends Hostile bidder Foundation Target

  12. Business use of foundations (3) • Protection against enemy Amsterdam Enemy Foundation NL Steel

  13. Creative • Delaware Trust Board of Foundation? Business • Foreign bank account: US Trust Co has proxy for corporation

  14. Trusts in Delaware To avoid mistrust of tax inspector + fear to lose assets. TRUSTWORTHY DELAWARE SYSTEM WITH GOOD JUDGES. Use of Statutory Trusts give more “official” status.

  15. Contact: Willem J.L. Calkoen NautaDutilh N.V. Weena 750, 3014 DA Rotterdam P.O. Box 1110, 3000 BC Rotterdam T: +31 10 22 40 406 F: +31 10 22 40 008 M: +31 6 534 90 451 E: willem.calkoen@nautadutilh.com

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