Select Language:
中文 | Pусский | English


  1. Why should you consider setting up a trust?

A trust may be useful in many situations, including the following:

You have built up a successful business. It may be wise to transfer some assets into a trust for protection in the event of business difficulties in the future.
You live in a country with serious economic and political uncertainties. Assets can be transferred into a trust in a safer jurisdiction.
You are concerned that your son / daughter may have a messy divorce and there may be a claim against family assets. Assets which have been transferred into a trust may be protected from such a claim.
You are a doting grandparent and would like to safeguard some funds in a trust to provide for the education of your grandchildren.
You have assets and family members in different locations around the world. For tax planning and efficient administration of those assets, a trust may be useful.
You wish to transfer the successful family business to the next generation without family disputes or disruption to business activities. The shares of the family company can be transferred into a trust and the lengthy probate process can be avoided in the event of death. Family disputes can also be minimized if a professional trustee is in control of the assets.
You are a prominent surgeon but are concerned that difficult patients may make negligence claims. Some of your assets may be protected by a trust.
You are wealthy but alone. You may need professional trustees to manage your financial affairs in the event that you become incapable of looking after yourself.
You have bought a large insurance policy and would like to ensure that upon death, the insurance monies are properly distributed to certain parties.
You have a burning desire to save the world. A professional trustee who shares your values can ensure that funds in your charitable trust are properly distributed to named beneficiaries.
  1. How do you set up a trust?

First, it is important to review your needs and objectives. You should also consider the size of the assets involved and the costs of setting up and maintaining a trust. Set-up fees may include stamp duties imposed on the transfer of assets. You should never transfer all your assets into a trust. You must retain enough funds for short-term needs.

In consultation with tax, legal or financial advisors, you should provide all relevant information such as your business structure, details of beneficiaries (citizenship, tax residence etc), and the location of the assets. Your advisors will need to evaluate your objectives, as well as all other relevant information in order to advise on an effective trust structure. Many issues need to be considered for example, should the trust be fixed or discretionary, revocable or irrevocable, which jurisdiction would be suitable for the trust as well as the underlying companies?

Once the trust structure has been finalised, the Trustee can then assist to set up the trust based on the tax and legal advice. You and the Trustee will sign a Trust Deed which must clearly state the intention to create a trust, identify the trust assets and name the Beneficiaries. You should provide the Trustee with a “Letter of Wishes” to guide the Trustee on how to distribute the trust assets.

In recent years, the threat of money-laundering and terrorism activities has increased greatly so it is important to comply with due diligence requirements. The Trustee must keep detailed records and you will need to provide relevant documentation including certified true copies of identification documents, proof of address, reference letters etc.

The final step would be to transfer the assets into the trust. An underlying company is often used to hold the assets which may consist of real property, an investment portfolio, cash, insurance policies or chattels. Usually a small sum ($100) is given to the Trustee to set up the trust and other assets are added into the Trust later.

Once the trust has been set up, the Trustee will administer the trust according to the terms of the Trust Deed.

  1. What are the responsibilities of a Trustee?

In Singapore, a professional trustee is required to comply with the Trustees Act, the Trust Companies Act, regulations / guidelines issued by the Monetary Authority of Singapore as well as all other applicable laws and regulations.

As part of trust administration, a Trustee’s duties include management of the trust assets, making of distributions and preparation of trust accounts. If there are underlying companies, the Trustee often provides management services for those companies. In addition, there are fiduciary duties which require that a Trustee must always act in good faith and in the best interests of the Beneficiaries. He must also protect, preserve and enhance the trust assets.

  1. Is it possible to still retain some control after a trust has been set up?

If you wish to continue to manage the trust assets, the Trustees Act allows you to reserve powers of investment and management of these assets.

It is also possible to appoint a Protector to ensure that the trust is being administered properly. The Protector may be a professional trustee or a family lawyer who understands the needs of the Settlor. The Protector is usually given certain powers such as the power to change the Trustee or to add / exclude beneficiaries.

  1. Is it necessary to make a will if a trust has been set up?

It is advisable to make a will to deal with the assets which have not been transferred into the trust. As part of good estate planning, an elderly person should also consider executing a Lasting Power of Attorney and an Advanced Medical Directive. It is best to seek early legal advice on these matters.

Disclaimer:This information is provided for general purposes only and is not intended to be relied upon as any form of professional advice. Padang Trust makes no guarantee, representation or warranty in respect of the information contained herein and accepts no liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice. Padang Trust hereby disclaims all liability for all and any actions taken, in reliance on the information set out in this website.