Latin American Family Wealth Planning

Benefiting from Cayman structures - STAR Trusts, Private Trust Companies, Foundation Companies and Privately Offered Funds

Philippa-Lucy Robertson and Eduardo D’Angelo P Silva

Latin American family offices are increasing in number and evolving in complexity to a degree determined by their size, investment objectives and strategies. While family offices come in all shapes and sizes, there are a variety of offshore structures, in particular Cayman structures, that are ideal for wealthy individuals and their families. These structures can be used singularly or in conjunction with each other as the needs of the family office evolve.

STAR Trusts

A STAR Trust is unique to the Cayman Islands and allows some of the limitations of traditional trusts to be overcome. For example, STAR trusts enhance the opportunities to plan for succession and intergenerational transfers of wealth by enabling the trust to run for people or for purposes or both, in perpetuity. STAR trusts provide the most flexible means to give a settlor control in perpetuity over the way the trust fund is managed; control is effected by the means and principles set out in the trust deed at the time the trust is settled with ongoing supervision by the methods described below.

Settlors of STAR trusts are attracted by the unique flexibility to meet potentially complex objectives in a manner determined by them to a greater extent than allowed by a trust established in other jurisdictions, including the BVI Vista Trust. The STAR trust’s objectives can include the holding of business assets to benefit both charitable and non-charitable ventures, as well as benefiting family members and connected persons in the same way traditional trusts are used. It is not a requirement for STAR trusts to have individuals as beneficiaries and it is common for settlors to establish STAR trusts for specific purposes.