What is a Trust?
A Trust is an estate planning instrument for an Individual to ensure that 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 (corporation) who manage the Trust assets, and
3. The beneficiary – the person who receives benefits from the Trust.
Why set up a Trust
Why do people set up Trust? Because …..
Assets held under Trust are not frozen upon demise;
Distribution of wealth, including periodical payment;
Ensures the wealth is protected against law suits as well as creditors;
Preservation of wealth; and
Fulfilling various personal objectives, including such as maintenance of dependents and education funds
What are the objectives of setting up a Trust for family goals?
To ensure beneficiaries do not squander their inheritance – providing staggered distribution during trust period;
Providing for the 2nd family confidentially;
Providing for certain family members secretly;
Ensuring children with special needs are provided for;
Avoid assets being claimed by spouse whom you want to avoid giving and wasteful or non-filial children; and
Protecting assets from being claimed by your ex-wife before any divorce proceedings starts.