To comply with AML CFT legislation there are additional things that you need to do when a Trust is involved.
What is a Trust?
A Trust is an legal entity which has a trustee, trust property and beneficiaries. A trustee owns and manages the trusts assets. They do this for the benefit of people know as the trustees. The person who establishes the trust is called the settlor.
What is a Trust Deed?
A ‘Trust Deed’ is a legal document that holds all the relationships together and defines how the trustees with operate the trust. Trusts are created as a way to separate and protect assets and to preserve wealth for others. For things like future generations or causes or purposes. For example a trust can be created by grandparents who wish to allow their assets to be used for the benefit of their grandchildren.
Because trusts can provide a level of anonimity to who is owning or controlling assets or money, a higher level of due diligence is required for trusts. 2Shakes has been desgined in to help you capture additional trust infomration in line with the Department of Internal Affairs (DIA) Trust Fact Sheet.
When a Trust is your customer
If a Trust is your client or customer add them as an organisation. The Trustee can be added as the main contact (not signing up as an individual). If it is an agreement, that other trustees need to sign make sure that the trust is the only entity on the agreement. Then you can add additional people to sign on the signatories and parties screen.
Under AML, when a trust is the customer you will need to capture additional information about the trust. You should ask for a copy of the trust deed in order to help you do this.
AML requires that you determine who the beneficiaries of the trust are. You need to record different beneficiary information depending if a trust has:
- less than 10 beneficiaries
- 10 or more benficiaries
- is a charitable trust
- is a non discretionary trust
2Shakes has a trust tab to help you record this information. You may also need to complete Customer Due Diligence on the Settlor, the Trustees or anyone else who is a beneficial owner of the trust. Use the People for IDV section of the AML screen to add these people in. A Trust should elevate the Customer Due Diligence level to Enhanced. Find out how we help you perform enhanced customer due diligence here.
When a Trust is a Beneficial Owner
When your customer is owned by a trust you will need to determine any of the people involved with the trust that you should identitfy. The trustee, beneficiaries and settlors should all be considered as part of CDD. 2Shakes identifies possible trusts who are shareholders and presents you with the information listed on Companies Office against the allocation of shares.
Use this link to find out more information about AML in 2Shakes.