A trust is a transfer of assets from the trustor (asset owner) to a designated trustee. The trustee invests and manages assets in accordance with the terms set out by the trustor, and then transfers the income generated to the beneficiary. The assets in trusts can include properties, securities (including stocks, funds, bonds, and other instruments), bank account balances, collectibles, life insurance plans, business assets, tangible assets such as vehicles or yachts, and MPF account balances.
Setting up a trust has numerous advantages, including preventing inheritances from being owned by non-grantees or non-beneficiaries and avoiding sales of properties (properties can be given to beneficiaries in phases, preventing them from simply cashing out). Trusts can be effective immediately once established, or can be created for wealth transmission to ensure adequate savings for retirement or safeguard trustees’ material circumstances through progressive, value-added structuring. A trust document is a private document and privacy is protected, unlike a last will, which a court may require to be disclosed.
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