Cyprus Trusts & Estate Planning

Overview

A trust separates legal ownership from beneficial entitlement. Assets are held by a trustee under a deed that sets out who benefits, on what terms and with what discretion. The Cyprus International Trust is the vehicle ordinarily used where the settlor and beneficiaries are outside Cyprus.

Its usefulness comes from what that separation makes possible: succession that takes effect without probate in multiple jurisdictions, protection of assets from claims against individual family members, and a single structure holding interests that would otherwise sit in several names across several countries.

Its difficulty comes from the same source. A trust is read by tax authorities, courts and banks in every jurisdiction connected to it, and each will apply its own rules on recognition, reporting and forced heirship. A deed that works in isolation and fails to account for where the family actually lives creates problems rather than solving them.

Trustee services are a regulated activity in Cyprus, which is what makes the administration accountable rather than informal.

What is included

• Structuring review covering the family's circumstances, asset locations and the jurisdictions involved
• Trust deed drafting, including the discretionary framework, powers and the appointment of a protector where appropriate
• Trustee services provided under licence, with proper records and decision-making
• Settlement of assets into the trust, coordinated with the transfer requirements of each asset class
• Interaction with any Cyprus holding company beneath the trust, so ownership and governance align
• Letter of wishes preparation, kept separate from the deed and reviewed as circumstances change
• Reporting obligations, including beneficial ownership and any automatic exchange requirements
• Coordination with local counsel on forced heirship and recognition in the relevant jurisdictions
• Ongoing trustee administration: accounts, distributions, minutes and periodic review

How Doviandi approaches this

We start with where the family is, not with the deed. Recognition, reporting and forced heirship rules differ by jurisdiction, and a settlor in one country with beneficiaries in three others has four sets of rules to satisfy. That map is drawn before drafting begins.

The trustee is expected to act as a trustee. Discretion held by a trustee who exercises it on instruction is discretion in name only, and a trust administered that way is the version most likely to be looked through. The appointments we arrange come with genuine decision-making and a proper record.

The letter of wishes is kept current. It is not binding, which is the point, but it is the document that tells a trustee what the settlor actually intended. Left unrevised for a decade it describes a family that no longer exists.

Tax is one consideration among several. Succession, protection and family governance frequently point in different directions from the tax analysis. Where they conflict we set out the trade-off rather than optimising the tax figure and leaving the family consequences to emerge later.

Related knowledge

Background reading on the questions this service answers:

• Administrative Service Provider on why trustee services are regulated and what the licence obliges a provider to do.
• Cyprus Non-Dom Status on the personal tax position that usually sits alongside a family structure.
• Can my spouse qualify for Cyprus non-dom? on why domicile is individual, which matters when planning across a family.