06 August 2020

Intertrust

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When you hear the word "foundation" your immediatecorrelation is probably "charity." But in the Bahamas,the definition has evolved from the classical philanthropic senseand foundations have become a formidable instrument to assist withprivate wealth planning.

The Bahamas Foundations Act, 2004 (later amended in 2007)relating to the appointment of a foundation agent, foundationcouncil and the rights of a beneficiary, is a relativelylittle-known private wealth vehicle. Over the years, we have seenthat certain instruments originating from common law jurisdictionsmay not be recognized in civil law jurisdictions, but foundationsare a dependable option due to their non-recognition, meaningthey're not subject to forced heirship statutes applied bycivil law countries.

Foundations are often referred to as a "hybrid," a termused because this instrument has attributes of a trust as well as acompany.

Here are the similarities of a foundation to a trust:

Has a settlor

The founder is similar to thesettlor

Settlor can have reservedpowers

Founder can have reservedpowers

Can be revoked

Can be revoked

Can be amended

Can be amended

Must have objects (assets)

Must have objects (assets)

Must have beneficiaries

Must have beneficiaries

No perpetuity period

No perpetuity period

May have a protector

May have a protector

After death of the settlor,probate is not necessary

After death of the founder,probate is not necessary

And here are the similarities of a foundation to a company:

Coupled with the Bahamas' stable regulatory framework,foundations are an untapped and practical private wealth option.Get in touch with an expert below to learn more.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Foundations Aren't What You Think: The Little-known Bahamas Private Wealth Structure Explained - Wealth Management - Bahamas - Mondaq News Alerts