What Is A Trust ?
A trust is created upon the transfer of assets (called the “trust property”) to a person (called the “trustee”) on the basis that the trustee shall hold the assets for the benefit of others (called the “beneficiaries”). The person who sets up the trust (i.e. the initial owner of the assets) is called a “settlor”. Before the trust is established, the settlor is the absolute owner of the assets. He is said to own the assets both legally and beneficially.
What Is A Trust Used For ?
Trusts are often used to protect assets and preserve them for the use and benefit of future generations.
There are many different reasons behind asset protection trusts and these include protection from creditors and predators, and tax minimisation.
A properly structured trust may also be used to avoid the necessity of a probate application. However, some assets in Singapore (such as HDB apartments and CPF funds) are not suitable for settlement on trust.
Types Of Trusts
There are dozens of different types and categories of trusts. However, for practical purposes, we need only be concerned with four main descriptions. These are the fixed trust and the discretionary trust, either of which may be revocable or irrevocable.
If you are interested in setting up a Trust or would like to find out more information, please contact us.
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