INSTRUMENT, TOOLKIT AND CONFIGURATION IN TRUST MANAGEMENT OF FAMILY AND PERSONAL ASSETS: CONCEPTUAL FOUNDATIONS

Abstract

The owner of family or personal wealth has several ways of organising its management and must choose between them, which requires comparing alternatives, that is, assessing their effectiveness. Framing such an assessment requires clarity about what exactly constitutes its object. Meanwhile, studies of trust management, private banking, wealth management and family offices employ closely related but inconsistently defined concepts: instrument, product, service, solution, structure. This article substantiates a system of three concepts. An instrument is defined as a course of action for organising ownership, structuring or managing assets that is selectable by the owner or manager; a toolkit is defined as the totality of interrelated instruments available for application; and a toolkit configuration is defined as a specific combination of selected instruments and the parameters of their application. The distinction rests on the criterion of controllability, supplemented by the requirement that an element be linked to the owner's objectives: only elements constituting the subject of managerial choice qualify as instruments, whereas market conditions, asset class returns and the legal environment are treated as external conditions. It is shown that the object of assessing management effectiveness as a whole should be the toolkit configuration.