Trusts, family estates, and wealth transmission in an unstable world

The transmission of wealth is no longer simply a matter of inheritance. It has become a governance issue. International families, assets spread across multiple countries, family businesses exposed to global markets, heirs with diverse interests, and shifting tax systems make planning based solely on wills or formal ownership of assets insufficient. In this context, a trust can provide order, continuity, and protection. But only if built on real purposes, effective powers, and coherence between family, assets, taxation, and governance. A trust is not a shield. It is a structure of accountability.

The economic phenomenon

Managing family assets has become more complex because wealth itself has become more mobile, complex, and international.

An entrepreneurial family may hold operating interests in Italy, real estate abroad, financial investments with international intermediaries, cross-border life insurance policies, liquidity in multiple jurisdictions, and corporate vehicles established for investment or governance purposes. Heirs may live in different countries, be subject to different tax regimes, and have differing expectations regarding the management of the joint assets.

Adding to this complexity are external factors. Geopolitical instability, market volatility, rising public debt, the potential rise in wealth or inheritance taxation in various jurisdictions, and growing international transparency make orderly planning increasingly important. Wealth cannot be thought of simply as a collection of assets to be transferred. It must be considered as a system to be governed.

Generational transition is often the point where fragilities emerge most clearly. Family businesses can enter crisis when it's unclear who should exercise control, how economic benefits should be distributed, what rules should govern relationships between heirs, and how the continuity of the business should be preserved. In complex estates, conflict arises not only from the division of assets, but also from the lack of governance rules.

In this scenario, asset protection cannot be reduced to concealment or mere segregation. Protecting means organizing. It means making assets legible, documented, coherent, and manageable over time.

The trust fits into this perspective. Not as a universal solution, nor as a tool to be used automatically, but as a possible legal framework to regulate the allocation, management, and transfer of specific assets according to a long-term plan.

The legal and fiscal framework

Generally speaking, a trust is a legal relationship through which certain assets are entrusted to a trustee for management in the interests of beneficiaries or to pursue a specific purpose. The settlor transfers assets or rights to the trustee; the trustee manages them according to the provisions of the trust deed; the beneficiaries may receive benefits, income, or patrimonial attributions as provided for by the structure; the protector, where applicable, may perform supervisory or management functions, within established limits.

The defining feature of a trust is the separation of formal ownership, management control, and economic benefits. The assets transferred should no longer be governed by the settlor as if they were still fully available to him or her. They must be administered by the trustee within a fiduciary capacity and according to rules consistent with the purpose of the trust.

This separation can lead to asset segregation. However, segregation should not be confused with opacity. A solid trust is not one that makes assets less visible, but one that clearly assigns powers, responsibilities, benefits, and governance rules.

The purposes can be diverse. There are family, inheritance, protective, entrepreneurial, philanthropic, or vulnerable beneficiaries trusts. Some trusts are discretionary, when the trustee has discretion in allocating benefits; others are more rigid or predetermined; still others can be fiscally or legally vulnerable when they are only apparent, intermediate, or lack real management autonomy.

The taxation of a trust depends on its specific structure. The tax residence of the trust, the position of the trustee, the nature of the beneficiaries, the methods of attributing income or assets, the location of the assets, the governing law, reporting obligations, and the relationship with the regulations governing tax monitoring, beneficial ownership, anti-money laundering, and the automatic exchange of information are all relevant.

Particular attention must also be paid to succession issues. A trust does not operate in a vacuum. It must be coordinated with the law applicable to succession, any rights of forced heirs, the location of assets, and the residence of beneficiaries. In international estates, this coordination can be particularly delicate, as the civil and tax rules of different jurisdictions may not coincide.

A trust, therefore, is not effective simply by virtue of its establishment. It is necessary to verify whether the trustee actually exercises his or her powers, whether the settlor has effectively transferred control, whether the purpose is consistent with the assets transferred, and whether the structure is compatible with applicable tax and inheritance law.

The function of the trust must be effective and documentable.

Implications for investors and wealth

For wealthy families, a trust can be especially relevant when the issue is not simply transferring assets, but managing a complex estate over time.

It can help ensure continuity, protect strategic assets, regulate generational transitions, separate ownership and management, protect minor or vulnerable beneficiaries, prevent conflicts between heirs, regulate relationships between family branches, and preserve the stability of the family business.

In a business family, a trust can help prevent inheritance fragmentation from compromising corporate control. It can establish rules for the distribution of economic benefits without necessarily granting all heirs direct power over management. It can separate those who benefit from the assets from those who govern them.

When assets are located in multiple countries, a trust can provide a link between assets, beneficiaries, and family goals. Real estate, equity investments, liquidity, financial instruments, policies, and corporate vehicles can be coordinated within a single framework, provided the structure is consistent with the applicable rules in the various jurisdictions.

Trusts can also serve a philanthropic or long-term purpose. Some assets need not simply be divided, but directed toward family, social, cultural, or entrepreneurial goals. In these cases, the value of the instrument lies not only in its protection, but also in its ability to transform the assets into a project.

However, a trust can become fragile when used without a real purpose. The risk increases if the settlor continues to effectively control the assets, if the trustee has a merely formal role, if the beneficiaries are ambiguously identified, if the letter of wishes contradicts the trust deed, if the assets transferred are inconsistent with the stated purpose, or if the structure is created only in the face of litigation, debt, or family crises.

Then there are tax and reputational risks. A trust that is opaque to banks, intermediaries, or authorities can generate requests for clarification, operational difficulties, and disputes. Governance documentation therefore plays a key role: trustee decisions, management criteria, assignments to beneficiaries, and relationships with advisors, banks, and investee companies must be traceable and consistent.

Ultimately, a trust can make the estate more orderly, stable, and manageable. But it cannot, by itself, correct the lack of a family or estate plan.

Strategic perspectives

Designing a family or estate trust should begin with the purpose. Before even choosing the governing law, trustee, or tax structure, it's important to understand the problem it seeks to solve.

Do you want to ensure the continuity of your family business? Protect vulnerable beneficiaries? Avoid wealth fragmentation? Coordinate assets held in multiple countries? Regulate relationships between children, spouses, family branches, or subsequent generations? Allocate part of your wealth to philanthropic purposes? Each answer leads to a different trust.

The second step is asset mapping. Not all assets are suitable for transfer to a trust, and not all require the same level of governance. Shareholdings, real estate, liquidity, financial instruments, insurance policies, and family assets all have different legal, tax, and operational implications.

The third element concerns the beneficiaries. It's important to understand who they are, where they live, what their needs are, what rights they may have, and what role they should assume over time. In family estates, legal technique cannot ignore the reality of personal relationships.

The choice of trustee is crucial. The trustee must be competent, independent, and truly capable of exercising his or her powers. A trust in which the trustee merely carries out the settlor's instructions risks losing credibility. If a protector is appointed, his or her role must also be carefully defined, preventing it from becoming a means of indirect control over the settlor.

The trust must then be coordinated with other financial instruments: holding companies, operating companies, foundations, policies, family agreements, wills, and governance agreements. Overlapping instruments does not automatically provide protection. On the contrary, it can increase complexity if a unified vision is lacking.

The tax situation must be assessed from the outset. Consideration must be given to the trust's residence, the tax status of the beneficiaries, the treatment of attributions, reporting obligations, the effects of indirect taxes, and compatibility with inheritance law. In international cases, it is essential to ensure coordination between multiple jurisdictions.

Finally, the trust must be maintained over time. Governance does not end with the trust deed. Decisions, minutes, financial statements, powers, correspondence, banking relationships, and the trustee's activities must demonstrate that the structure is truly functioning according to its stated purpose.

The message is simple: a trust is not a screen, but a structure of accountability. To function effectively, it must have a real purpose, effective governance, and consistent documentation.

Conclusion

In an unstable world, asset protection isn't the same as concealment. It's the same as order.

A trust can be a powerful tool for continuity, accountability, and wealth management. It can help a family distinguish ownership, control, and economic benefits. It can protect strategic assets, facilitate generational transitions, and enhance the stability of an international wealth structure.

But a trust is only solid when form, substance, and governance tell the same story.

In the new international context, heritage must not only be protected, but governable.

Trust

About the Author

Edoardo Tamagnone is a lawyer and partner at the law firm Tamagnone Di Marco Avvocati Associati . He focuses on international taxation, investment structures, and wealth planning for investors, family offices, and businesses with cross-border operations.

He works between Turin and international contexts, focusing on the intersection of law, economics, and global capital.