|
A Trust is an estate planning instrument for an Individual to ensure the total protection of asset(s) is preserved for the beneficiaries while in the safe hands of the Trustee.
|
|
There are three parties
involved in a Trust.
1. The settlor –
person who sets up the Trust.
2. The Trustee –
the person or a corporation who manage the Trust assets
3. The beneficiary –
the person who receives benefits from the Trust
How does a Trust work?
The
Trustee receives the assets from the Settlor and is legally obligated to hold
and manage the assets for the enjoyment of the beneficiaries during the trust
period set by the Settlor. It
is commonly known as “Living Trust”
A person
appointed by the settlor with the following job scope:
1. Act as a watchdog for
the settlor when he passed on
2. Advise the trustee on
the needs of beneficiaries
3. Recommend payment to
beneficiaries using Letter of Wishes
4. Has the power to
remove and replace the Trustee.
|
|
The assets commonly used to set up a trust are: cash, insurance policies, unit trust, properties, shares.
The property under Trust do not belong to the Trustee personally. Though the trust property is registered in the Trustee’s name, it is NEVER part of the Trustee’s own properties when he dies. Only the Trust beneficiaries will be entitled to the Trust Fund NOT the Trustee’s own beneficiaries.
|
|
1)
Distributing Wealth to Avoid Probate
Trust of this nature is useful when you have:
1. Minor children and spouse who is a homemaker or earning not as much as you
2. Special children requiring funds for medical, education and living expenses
3. Have a 2nd Family to provide for
4. Financing children’s tertiary education.
|
|
|
2)
Protecting Wealth
Protecting Against Wasteful Beneficiaries
The Protector appointed will ensure there is no wastage of moneys receive under the Trust. Protector can stop disbursement of fund to undeserved beneficiaries.
Against Creditors of Settlor and Beneficiaries
Protector will instructs Trustee to stop the disbursement of fund whenany beneficiary has become a bankrupt.
Protecting Wealth Against the Settlor's Creditors
When a person becomes a bankrupt, usually an investigation by the authorities is done to recover assets transferred up to 5 years prior to bankruptcy. The suspicious
transfers
will be nullified to recover the assets to pay the creditors.
|
|
|
3) Protecting Wealth Against the Beneficiaries’ Creditors!
This is achieved by creating a Discretionary Trust when any of the beneficiary becomes bankrupt, he will no longer be entitled to the benefit under the Trust.
4) Preserving Wealth for Your Great Grandchildren
Preserving assets for your great grandchildren.
5) To cater funds for various family situations
For example, education and Maintenance fund for grandchildren, nephews etc
|
|
|
|
- Assets held under Trust are not frozen upon demise.
- For the distribution of wealth, including periodical payment.
- To ensures the wealth is protected against lawsuits as well as creditors.
- The preservation of wealth.
- Fulfilling various personal objectives, including such as maintenance of dependents and education funds.
|
1) Distributes the way
you want it to
For
example,
set goals
to be achieved (such as a college degree) before your loved
ones receive anything from the trust or to be used for their medical
expenses. This avoids wastage of the trust fund.
2) You decide who is to
receive
Just like a
Will, its your choice, no one can challenge it.
3) No fuss and instantly
available as it is not part of the estate
No lengthy legal procedure to adhere. Trust Fund is readily available for
the
beneficiaries’ use because it is in
the Trustee’s name. It complements the Will you wrote.
4) Have a peace of
mind
Once the
trust is created and the Protector appointed, the well-being of your
beneficiaries are taken care of.
5) Get assets protected
from creditors - Irrevocable Trust
When assets have been in the trust for more than 5 years.
6) Not easily
contested
Disgruntled family members who are not receiving anything from the trust are unable to
make claims against the trust because the assets are no longer under your
name.
7) Your instructions on
distribution in the Trust Deed can prevent your wealth from being
squandered
 
|
