Investment

Maximizing Your Investments for Irrevocable Trustees in Singapore

Last year, one of the strongest economies in all of Asia was the Singapore As Singapore is one of the few Asian countries with a culture of trust, its trust economy has grown over the decades.

The importance of a properly crafted trust cannot be overstated. Students, business persons and entrepreneurs alike study, conduct international business, or invest heavily in Singapore and leverage the country's trust to their benefit. Over the course of the last three decades, Singaporean's trust has grown from $384 billion at the time of instability to a quarter of a trillion today. Among the many institutions that enjoy a sizeable slice of the Singaporean economy, one of the dozens is the estate planning companies that counsel clients on estate matters.

The importance of trust cannot be overestimated. It is a unique alternative to conventional estate planning that has been honed over hundreds of years. The common linked phenomena which links Singapore's estate planning system with the estate planning systems of other countries is that the Singaporean's trust has been framed and defined precisely to ensure the protection and estate transfer advantages. Estate planning assumes a significant importance among the higher net-worth families as it is often these families who need the most financial and legal protection and liberal legal exemptions.

Those who conduct estate planning usually select family trusts as a foundation for their estate plan for two basic reasons. The first being that a trust is less complex to blueprint and as such, it provides a reasonably quick and efficient means with which to ensure the protection and estate transfer certainty that a proper estate plan requires. The second being that trust services in Singapore are relatively inexpensive and also, these services provide a relatively cost-effective means to protect and preserve the wealth of Singaporeans. A trust is effectively a legal method of transferring assets and managing the affairs of an estate (as opposed to the outright transfer required in a will). There are two main types of families trusts, and the inheritance — enjoys or can themselves choose the type of trust they want and the trustee that will manage the trust- although this can leave the trusts vulnerable to political interference.

Life insurance trusts are irrevocable life insurance trusts (ILIT). The irrevocable life insurance trust, allows the relatives of certain beneficiaries to benefit from the life insurance benefits on the trust with minimum loss of control and legal  requirements.

The second type of trust is more complex and well known. A family trust, is created during the Singapore's rigidity and Stability and operates like a regular trust except that the trust is limited to a period of five or fewer years. This gives the trust powerful and unproblematic powers to improve the estate planning of Singaporeans in a subtle, yet significant way. A third party, the trustee, is defined in Malaysia as the client and appoints a good legal and wealth adviser, so he can manage said trust. The trust is a substitute for a will, and can be made ahead of the grant or with only two years of the actual granter's death being necessary. The family trust retains the settlor's life and personal benefits. A family trust is deemed to be valid after one year of the death of the granter. Upon the granter's death, the trust falls outside the purview of the minimum marital age and the trust property owns by the family trust is protected.

While the family trust protects the settlor's wealth and creates opportunities to pass on more efficiently, it does require the trustor, the settlor, to execute a formal trust. The trustor is effectively being protected when dealing with Singapore's probate inquiry. Public scrutiny is hence a vital part of trust administration.

Trust administration is also a time-consuming and costly process. As a trustee, you must take time to research the legal implications of your trust thanks to the trust planning attorney. The legal documents reviewed must particularly cover the types of planning it will make and documents necessary to be included within the trust. Some basics are the Trust deeds, and a Power of Attorney. It is also necessary to obtain the Power of Attorney from the Trustee at the time of trust formation as well as the Trust Deed. These executive documents must be validated and filed in the Secretary of States.

Preparing an effective trust involves devising a workable structure as well as managing the trust technically. The trust is a powerful tool for the liquidation and administration of an estate. If managed properly, it can ensure the preservation of wealth for generations.