Trust Settlement Agreement for United Arab Emirates

Trust Settlement Agreement Template for United Arab Emirates

A Trust Settlement Agreement under UAE law is a comprehensive legal document that establishes and governs the operation of a trust structure, particularly within the UAE's financial free zones such as the DIFC and ADGM. The agreement details the transfer of assets from a settlor to trustees, outlines the rights and obligations of all parties involved, and establishes the framework for managing and distributing trust assets. It incorporates specific provisions to ensure compliance with both UAE federal laws and free zone regulations, while potentially including considerations for Sharia compliance where required.

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What is a Trust Settlement Agreement?

The Trust Settlement Agreement serves as the foundational document for establishing trust arrangements in the UAE, particularly within the DIFC and ADGM financial free zones. This document is essential when individuals or entities wish to create a trust structure for asset protection, succession planning, or wealth management purposes. The agreement must navigate the unique legal landscape of the UAE, which combines civil law, common law (in financial free zones), and Sharia principles. It typically includes comprehensive provisions regarding trust assets, trustee powers, beneficiary rights, and administrative procedures, while ensuring compliance with UAE federal laws and specific free zone regulations. The Trust Settlement Agreement is particularly valuable for high-net-worth individuals, family businesses, and corporations seeking to establish structured asset management and succession planning solutions within the UAE's legal framework.

What sections should be included in a Trust Settlement Agreement?

1. Parties: Identifies and defines the Settlor, Trustee(s), and initial Beneficiaries

2. Background: Sets out the context and purpose of the trust settlement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and interpretation rules

4. Declaration of Trust: Formal declaration establishing the trust and transferring assets

5. Trust Purpose and Duration: Specifies the purpose of the trust and its intended duration or termination conditions

6. Powers and Duties of Trustees: Comprehensive outline of trustee authorities and responsibilities

7. Trust Assets: Description of initial trust property and rules for handling additional contributions

8. Distribution of Income and Capital: Rules governing how trust income and capital are to be distributed

9. Appointment and Removal of Trustees: Procedures for changing trustees and related requirements

10. Beneficiary Rights and Interests: Defines the rights of beneficiaries and how their interests are protected

11. Trust Administration: Day-to-day management procedures and administrative requirements

12. Amendment and Variation: Procedures for modifying trust terms

13. Governing Law and Jurisdiction: Specifies UAE law application and relevant jurisdiction

14. Execution and Date: Formal execution provisions and effective date

What sections are optional to include in a Trust Settlement Agreement?

1. Protector Provisions: Include when a trust protector is appointed to provide additional oversight

2. Sharia Compliance: Include specific provisions ensuring compliance with Islamic law when required

3. Investment Guidelines: Include when specific investment restrictions or guidelines are needed

4. Family Governance: Include for family trusts requiring specific family management structures

5. Charitable Purposes: Include for trusts with charitable elements or purposes

6. Letter of Wishes: Include reference when settlor provides non-binding guidance to trustees

7. Anti-Duress Provisions: Include to protect against forced changes under duress

8. Contingency Planning: Include specific provisions for unforeseen events or circumstances

What schedules should be included in a Trust Settlement Agreement?

1. Schedule 1 - Initial Trust Assets: Detailed inventory and valuation of assets initially settled into the trust

2. Schedule 2 - Beneficiary Details: Complete information about initial beneficiaries and their respective interests

3. Schedule 3 - Trustee Powers: Comprehensive list of specific powers granted to trustees

4. Schedule 4 - Administrative Provisions: Detailed procedures for trust administration and management

5. Schedule 5 - Fee Schedule: Details of trustee compensation and other administrative fees

6. Appendix A - Investment Policy Statement: Detailed investment guidelines and restrictions

7. Appendix B - Compliance Requirements: Specific regulatory and reporting requirements applicable to the trust

8. Appendix C - Distribution Rules: Detailed rules and procedures for making distributions to beneficiaries

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Private Banking

Wealth Management

Family Office Services

Real Estate

Legal Services

Corporate Services

Islamic Finance

Asset Management

Estate Planning

Relevant Teams

Legal

Compliance

Wealth Management

Private Banking

Corporate Services

Risk Management

Islamic Banking

Trust Services

Asset Management

Client Relations

Financial Advisory

Estate Planning

Relevant Roles

Trust Officer

Private Banker

Wealth Manager

Legal Counsel

Compliance Officer

Financial Advisor

Estate Planner

Trust Administrator

Corporate Services Manager

Family Office Manager

Relationship Manager

Risk Manager

Islamic Finance Specialist

Asset Manager

Investment Advisor

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