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Foundations, like trusts, evolved during medieval times. However, whilst trusts grew in popularity during the centuries, the Foundation remained the poor cousin until its recent revival as a very effective estate planning vehicle, affording increased asset protection and confidentiality.

Foundations as structures have developed as a civil law concept and are recognised by many civil law systems, which do not recognise trusts. The Foundation has a separate legal personality, whose existence and identity (and consequently the property, including real estate, owned by it), are entirely separate from that of its founder or of any other person. The Foundation does not have shareholders, but holds the assets for the benefit of beneficiaries. The dual nature of the entity (it is a combination of a trust and a corporation) allows the beneficial aspect of each component of the hybrid to work to the benefit of the entity as a whole. Its corporate nature allows a Foundation to be a holding vehicle of subsidiary companies, to control and exercise the rights of shareholders, to own real property in its own name, to contract with third parties and to sue (and be sued) in its own name and capacity.

Foundations were originally the preserve of certain jurisdictions (notably Liechtenstein) but other jurisdictions have followed Liechtenstein's lead (Luxembourg, Switzerland and Jersey) and Guernsey enacted "best of breed" Foundations legislation at the end of 2012.

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