Bank of Bermuda's role in the private wealth industry is different from typical private banking operations. Rather than servicing clients with investment products and managing their assets, the bank focuses on trusts and fiduciary services. Trusts are ancient structures, typically used today to help wealthy individuals and families protect their assets and pass them on through the generations without being eroded by estate duties or subject to family squabbles. For institutions, trusts form the ownership basis of some common vehicles, notably unit trusts. Bank of Bermuda is also active in providing these services. Trusts are the mainstay of the bank's predominantly fee-based business in Hong Kong. On the private side, every solution is tailored to the client's situation, but a common thread is that part of a family's assets are transferred into a trust. The legal ownership of the assets passes to the trust, and arrangements can be made for succession, inheritance or general asset protection. Bernard Rennell, head of private client services for Bank of Bermuda, says: 'A trust is a relationship. It is not a separate entity like a company or a mutual fund. 'It is a relationship between the settlor, the person who contributes the assets, the trustee, the person who holds the assets, and the beneficiary, the people the trust is intended to benefit. The rights of the parties are all set out in the trust deed.' Trusts can circumvent frustrating and expensive problems. For example, the death of a family member can leave the deceased's assets tied up in different countries indefinitely until affairs are sorted out. Properties and shares stay frozen, unable to be sold by discouraged relatives. A trust structure could ensure assets are accessible and transferable in these trying circumstances. A widow or widower could be left with massive estate tax liabilities in some cases. A trust structure could legally minimise the reach of estate duties by changing the real ownership of the assets. 'We provide trust structuring for wealthy families predominantly in Asia' in addition to other services, Mr Rennell says. 'It is all at the more sophisticated end of private wealth structuring.'
