MALTA Law and Practice Contributed by: Rosanne Bonnici and Rebecca Diacono, Fenech & Fenech Advocates
When considering digital assets such as email accounts or cloud accounts, the starting point should be the terms and conditions that the deceased would have accepted with reference to the particular digital asset concerned. Each such set of terms and condi - tions is to be considered on a case-by-case basis, in order to take a view as to whether or not heirs have acquired a right to access that particular account. It is most often the case that accounts are non-trans - ferable and, accordingly, the service provider would be expected to refuse to provide access to any such account to the account holder’s heirs. The same principle applies to other digital assets, such as financial tokens and cryptocurrency, if there is no private key involved in the ownership thereof. If there is a private key, the heirs may only benefit if they have access to or hold that private key in prac - tice. If financial tokens transferred upon death have the same characteristics as “marketable securities” as defined in the DDTA, transfer duty shall be levied on the transfer thereof to the deceased’s legatees or heirs inheriting such. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Maltese law caters for a wide range of both trusts and foundations. In the case of trusts, in addition to the typical discretionary trust, the law also caters for the settlement of spendthrift trusts, disability trusts and charitable trusts, as well as the concept of a private trust company that can go a long way to granting a number of settlors/a family office stronger controls over the family’s assets. Where foundations are con - cerned, one can set up the following: • a social/purpose foundation with charitable or social objectives or similar; • a public benefit foundation set up for the benefit of public interest beneficiaries such as religious or public organisations; • a private benefit foundation that essentially caters for a public purpose vehicle with an element of private benefit included therein; or
• a private interest foundation, which is the vehicle of choice for a founder wishing to set up a vehicle that will hold and administer assets for their benefit and that of their family and future generations. While the foundation is firmly rooted in civil law prin - ciples, being a separate legal person to the founder and the beneficiaries, the law has introduced some elements that are akin to the environment of the trust, with concepts such as the beneficiary statement that may take the place of a letter of wishes or the role of a protector, among others. This may make the Maltese private interest foundation, in particular, more attrac - tive to a family that is drawn to the trust world but that would be more comfortable with a vehicle they can see, touch and be involved in, to the degree required. As far as trusts are concerned, the private trust com - pany is subject to a regulatory regime administered by the financial services authority, and provides a further option to families wishing to structure their wealth. A private trust company may be set up if: • its objectives and activities are limited to acting as trustee in relation to a specific settlor or settlors and providing administrative services in respect of a specific family trust or trusts; • it does not otherwise hold itself out as a trustee to the public; and • it does not act habitually as a trustee, in any case in relation to more than five settlors at a time. The private trust company is attractive for individuals who wish to settle assets on a trust for the benefit of their family yet retain a level of control over such through their family office or otherwise. 3.2 Recognition of Trusts Malta has a fully fledged trust law, introduced in the late 1980s and largely modelled on Jersey trust law. Malta has also adopted the Hague Convention on the Law Applicable to Trusts and on their Recognition (the “Hague Trusts Convention”), with foreign trusts being recognised thereunder. The validity of a foreign trust and its construction and administration shall be gov - erned by said foreign law and recognised in Malta in terms of the Hague Trusts Convention.
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