Foundations & Trusts: A Strategic Move for Long-Term Wealth Preservation

For families and entrepreneurs with significant assets, the question is not only how to grow wealth, but how to ensure it is preserved, protected, and passed on exactly as intended. In the UAE, as well as in established global financial centres, foundations and trusts are increasingly becoming the preferred choice for structuring and safeguarding wealth.

While both serve the common purpose of protecting assets, they are not identical. Choosing between them, or knowing how to combine them effectively, requires understanding their differences, benefits, and how they align with your long-term objectives.

What Makes a Foundation Different from a Trust?

A Foundation is a separate legal entity, often used for asset holding, charitable purposes, or family governance. It owns the assets in its own name and operates according to a charter and regulations set by the founder.

A Trust, on the other hand, is a legal arrangement where a trustee holds and manages assets for the benefit of beneficiaries, under the terms of a trust deed. The trustee is legally responsible for managing those assets in accordance with the trust’s terms and relevant laws.

In the UAE, the DIFC and ADGM both offer comprehensive frameworks for establishing foundations and trusts, designed with international families and cross-border investors in mind (DIFC Legal Framework for Foundations | ADGM Foundations).

Why Founders and Families Choose These Structures

• Generational Wealth Planning – Ensures assets are transferred according to precise wishes, avoiding disputes and delays
• Protection Against Legal Claims – Separates ownership from personal name, reducing exposure to creditors or litigation
• Privacy – In many jurisdictions, information about beneficiaries and holdings is not publicly disclosed
• Cross-Border Flexibility – Useful for international families with assets in multiple countries
• Governance and Control – Allows for structured decision-making over how wealth is managed and used

The OECD recognises such structures as legitimate tools for succession and asset management when established transparently and in compliance with tax laws.

Real-World Scenarios

• A UAE-based entrepreneur with global real estate uses a foundation to consolidate property ownership, making succession planning straightforward for heirs across three continents.
• A family business owner in London creates a trust to protect the company shares from being divided in a potential family dispute, ensuring the business stays under unified control.
• An investor with assets in Europe and the Middle East uses a hybrid approach, placing operating companies into a foundation while holding investment portfolios in a trust for tax and governance efficiency.

Common Pitfalls to Avoid

• Poor jurisdiction selection can weaken legal protections or cause unexpected tax implications
• Outdated governing documents can cause disputes if they do not reflect current laws or family circumstances
• Inadequate trustee or council oversight can lead to mismanagement of assets
• Neglecting compliance requirements, such as annual reporting or filings, can invalidate protections

Foundations or Trusts: Which Is Right for You?

There is no one-size-fits-all answer. Your choice depends on:

• The nature and location of your assets
• The level of control you want to retain
• Your family’s long-term governance needs
• Tax and regulatory considerations in relevant jurisdictions

Working with experienced advisors ensures you build a structure that is legally sound, strategically aligned, and future-proof.

New to Trinity Group? Here’s How We Can Help You

We specialise in establishing foundations and trusts that work seamlessly across multiple jurisdictions. From selecting the right legal framework in the UAE, to drafting charters or trust deeds, to ongoing governance support, we ensure your structure is both compliant and tailored to your objectives.

Book Your Free Consultation

Already Working with Trinity Group? Let’s Take the Next Step

If you already have a foundation or trust, we can review and optimise your structure to reflect new laws, family changes, or strategic goals. Our team ensures your wealth planning tools remain strong and effective for generations to come.