What is Trust?
Trust is a unique legal concept in the common law legal system which Singapore adopts. Essentially, Trust is a legal arrangement which allows dual ownership of an asset which can yield certain desirable asset protection and estate planning outcomes.Trust consist of the followings:
Settlor
transfers property & assets to
Trust (through Trustee)
hold property & assets for benefit of
Beneficiaries
What is Trust?
Trust is a unique legal concept in the common law legal system which Singapore adopts. Essentially, Trust is a legal arrangement which allows dual ownership of an asset which can yield certain desirable asset protection and estate planning outcomes.Trust consist of the followings:
Settlor
transfers property & assets to
Trust (through trustee)
hold property & assets for benefit of
Beneficiaries
Why should you set up a Trust?
01
Avoidance of probate & confidentiality
02
Protection against settlor's creditors
03
Staggered distribution of Trust assets to beneficiaries
04
Directing the Trust Assets to the right person
Let's look at an example
1. Peter is caring and responsible husband, father and son to his elderly mother.
2. He is concerned that his children and elderly mother will mismanage their inheritance if/when he dies prematurely.
3. Hence, Peter sets up a Life Insurance Trust to legally own his life insurance policies and manage these policies for the benefit of his children and elderly mother.
4. Unfortunately, Peter dies two years later in an unexpected road accident.
5. The Trustee receives the death benefit proceeds from the life policies and distributes the money in the form of monthly income to Peter's children and elderly mother until the children grow up into financially responsible adults and his elderly mother arrives at the end of her life expectancy.
6. In this situation, the Trust was setup to protect the assets from mismanagement by the beneficiaries.
When you look at your assets-liabilities and income-expenses situation, ask yourself these questions
Is there any asset you wish to set aside or segregate for a purpose or person?
Is there any asset you wish to ring-fence against liabilities’ risk?
Is there any asset you are currently holding or wish to hold in Trust for someone else?
Is there any liquidity generating asset you wish to segregate from your potential probate?
With all the considerations properly thought through, you can now sit down with us to design your personalised Trust structure.
Trust, when properly executed, will empower your assets to impact others in positive ways; and in so doing, you can reach a state of peace with yourself.
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