Ensuring Digital Signature Lawfulness for Non-Profit Organizations in UAE

How to eSign a document: digital signature lawfulness for non-profit organizations in UAE

so what's better a trust or a foundation that's almost like asking what's better a race car or a dump truck because it really depends on how you want to use it and by the time you finish watching this short video you'll know what each one is and which one to choose now ing to the irs business master file there are 1 million 729 000 non-profits and foundations in the u.s of those 7 or 119 791 are foundations foundations account for 18 of all the charitable giving in the us most commonly to health education and human services as well as community and economic development and art now there are 209 million 128 367 adults plus or minus in the u.s 40 of them or about 84 million of them have some type of living trust or will so when you're securing your assets from lawsuits or doing your estate planning to transfer your assets when you pass away those are often the two choices that come up a trust or a foundation both of which can secure assets and wealth for the future both have their pros and cons so the answer to which one is better will depend on your needs and what you want to get out of them to better understand which choice is right for you we'll start by defining foundations and trusts hi i'm the business guy and i've been setting up companies trusts and foundations for clients for over 30 years now and i'm the ceo of lawyers limited the leading asset protection firm in the country we have attorneys on staff and i believe we have over 70 000 clients in our database and we have clients all over the globe and by the way if you're watching this on youtube can you please click the like button below so youtube will promote this video thank you so much you can enter your comments and join our community by clicking the subscribe button so that when more videos come out like this you'll be up to date right away so what is a foundation a foundation often called a private foundation is a charitable organization that might qualify as a public charity by government standards ing to investopedia this organization type is considered a non-profit it is often created through a single primary donation from a business or individual the foundation's own board of trustees or directors that you can appoint manage the funds and programs within the foundation instead of funding through periodic donations like a public charity often is an initial donation usually funds the foundation in different countries such as nevis and the cook islands one can continue to invest and receive funds from a foundation private foundations are only exempt from a u.s tax perspective when they meet the requirements of 501c3 of the internal revenue code foundations generally fit into two categories private operating foundations and private non-operating foundations private operating foundations run organizations or charities that they fund with the income from their investments private non-operating foundations on the other hand disperse their funds to other charitable organizations now what is a trust a trust creates a legal relationship among three parties one party we call the trustor settler or grantor all words essentially have the same meaning gives another the trustee the right to hold the title to property or assets the trustee does this for the benefit of third parties called the beneficiaries people often use trust to add legal protection to the trust store's assets another common use is for estate planning that is to ensure the assets are distributed ing to the trust store's intentions to save time on transfer of assets to heirs and sometimes to reduce inheritance or estate tax many people use trust to own assets anonymously so they are often the choice for estate planning tax planning and privacy trusts come in various forms a living trust holds assets during an individual's lifetime and usually manages and distributes them in a whole room part after death whereas a testamentary trust specifies how an individual's assets will be used after their death trust can either be revocable and thus can be changed or terminated by the trust door during his or her lifetime or irrevocable thus unchangeable directly by the trust door though in certain jurisdictions such as the cook islands a settler can request that the trustee make certain changes even if the trust is irrevocable most trusts are funded where the assets are placed into it during a trust door's lifetime but some are unfunded agreements that become funded upon the trustor's death now that we understand a foundation versus trust separately let's compare them side by side and look at them more closely here are examples of a trust parents may make a trust of their children and grandchildren receive assets after they die people who have concerns about lawsuits setting up an asset protection trust to keep assets away from creditors those who want to own real estate privately transfer property into a land trust an elderly person may set up a medicaid trust and transfer all assets into the trust so that after a five-year holding period personal assets do not exceed the amount that qualifies for medicaid support examples of foundations individuals families companies or public entities such as hospitals and churches set up foundations to support a charitable cause such as a childhood disease hunger education general health care etc some well-known foundations include the make-a-wish foundation the bill and melinda gates foundation pbs foundation rockefeller foundation nobel foundation and walton family foundation legal origin of a trust is common law that is from england the legal origin of a foundation is civil law that is mainland europe who originates the organization for a trust that is a settler aka grantor trust store for a foundation it's his founder ownership type beneficiaries essentially own the trust for a foundation it has no shareholders therefore there are no owners with a trust a certificate of trust may or may not be public but not the trust itself with a foundation the documents are publicly filed similar to a corporation with trust you have asset protection trust estate planning real estate such as land trust personal property trust such as automobiles and household goods charitable special needs for those with disabilities for foundations you have independent foundations usually founded by an individual family corporate foundations founded by corporations and operating foundations where the purpose may be research public benefit etc with trust there are two broad tax categories simple trust and complex trusts with simple trust the parties associated with the trust such as the trust or pay taxes on trust profits with complex trusts the trust itself pays the taxes on his own profits foundation taxation in the tax reform act of 1969 private foundations are exempt from most taxation by providing social benefits under the following criterion number one the foundation must pay at least five percent of the value of its endowment and none of it must benefit a private individual number two it must not own slash operate a for-profit business number three it needs to file detailed reports and conduct audits each year number four it must meet accounting requirements of non-profit organizations benefits of both foundations and trust now there are several benefits that foundations and trusts enjoy both trusts and foundations are flexible arrangements they both run on the discretion of the trustee or board which determine how the benefits are distributed and when ing to the trust store or founder's intentions and they can be set up to last for an unlimited amount of time depending on the jurisdiction now with respect to trust in the jurisdictions where we establish asset protection trusts the trust can last indefinitely but in many jurisdictions a trust couldn't last more than 21 years after the death of a potential beneficiary who was alive when the trust is created about half the states have done away with the rule against perpetuities altogether this makes either attractive options for dynastic private wealth structures as they can hold family wealth for many generations now privacy is an important aspect in both investment types people can create trusts and foundations for individuals based on private arrangements while some information about foundations is required to be publicly available there is no requirement to the identity of the founder beneficiaries or purpose of the foundation publicly trusts do not require any registration of documents or information in the public domain so what's better for asset protection from lawsuits a foundation or a trust the trust with the strongest case law history and statutes are those in cook islands and nevis there is a short statute of limitations on fraudulent transfer of one to two years that means that once you transfer the assets into the trust and the requisite time passes the courts will not even entertain challenges to transfers into the trust similarly with a foundation in order to enjoy asset protection you will need to have council members who are outside of your country of residence such as nevis cook islands or panama the bottom line for asset protection use trusts then put an llc inside the trust so you can hold the llc management position and sign on the company bank account until the bad thing happens then your trustee of the trust that owns the llc will step in as llc manager to protect you tax season fees and taxes on trusts and foundations vary greatly because of their different statuses ing to the irs there is an excise tax of 2 percent on the net investment income of most domestic tax-exempt private foundations this includes private operational foundations exempt operating foundations are not subject to tax in certain cases the tax for a foundation can be reduced to one percent these taxes must be reported on a form 990 pf now trusts are taxed differently ing to their type instead of a fixed tax rate that foundations have the taxes on a trust are dependent on the income that's distributed to its beneficiaries there are tax deductions for that income and the beneficiary pays income tax on the taxable amount capital gains from this amount may be taxable to either the beneficiary or the trust if the income or deductions are part of the change in the principal or part of the estate's distributed level income then the trust pays the income tax and it is not passed on to the beneficiary with simple trusts as the tax code calls them the income tax responsibility flows through the trust to the parties associated with the trust complex trusts on the other hand pay their own taxes now here comes the disclaimer keep in mind that you should not rely on this information solely because tax and other laws change and your situation may vary so be sure to get and maintain the advice of a knowledgeable licensed accountant and or attorney when you use a truster foundation vehicles for charitable contributions if your purpose is mainly to make and gain charitable contributions there are a few different types of charitable trusts and foundations foundation source describes one foundation and two trust types using a private foundation for charitable contribution allows donors to have complete control over granting and investment decisions the founder and contributors can fund it with almost any kind of assets including private equity tangible assets real estate and intangible personal property a private foundation has flexibility in the activities that manage the assets it can allow such thing as grants to individuals scholarship programs programs related to investments direct charitable activities and international granting now there are two main types of charitable trusts the first is a charitable remainder trust a crt provides the donor or other parties indicated with cash flow while also securing a current year personal income tax deduction the donor contributes assets to the trust which in return makes annual distributions to the donor or someone else for a stated term after the end of the term any remaining assets in the trust go to whatever charities the donor has chosen a family's private foundation can be the recipient of those assets now the second type of charitable trust is a charitable lead trust a clt is designed to allow tax-free gifts to a donor's family to do this the assets are first donated to the trust which then provides cash flow to the donor's chosen charitable organizations for a specified period of time any assets remaining in the clt after that period pass on to the donors family free of any estate or gift taxes how to set up a foundation or trust when you're ready to make that next step in creating a trust or foundation make sure you have a clear idea of what each one does and what you wanted to do decide what advantages are most important to you and what your overall intention is also start considering who you might want to be your trustee or a member of your board as these individuals will have a lot of responsibility in maintaining your assets so it's important to choose people you can trust to set your goals into action you don't need to figure out how to set up a foundation or trust getting the most out of your assets and ensuring that you're within the correct legal parameters means getting professional help call or visit our organization at the number or website below and our attorneys and consultants can help whether you've decided on the right choice or still need a little help deciding on a foundation or trust we can help you better understand your options feel free to contact us today to set up a foundation or trust to give yourself and your family a brighter future please click like subscribe and share this video with others thanks for watching this is the business guy [Music] okay [Music] you