Trust Services
With the attention of high net worth individuals on wealth preservation, protection, and global asset allocation, they are increasingly concerned about tax arrangements and inheritance for their children, creating a growing demand for customized personal wealth inheritance and asset protection solutions.
Through a meticulous and comprehensive service process, we fully understand the wealth management needs of high net worth clients, assist them in transforming diverse needs into specific trust schemes, and tailor practical and feasible trust structures to help them achieve their private wealth management goals.
What is a trust?
The concept and principles of a trust originated in England and have a history of more than 800 years. It is widely practiced in common law jurisdictions and is also applicable in some codified law countries, recognized by international conventions.
A trust is a legal relationship usually created by a contract and its declaration of intention (trust deed), whereby a person (the settlor) transfers assets (trust property) to another person or a trust company (the trustee) for the benefit of a third party (the beneficiary). Once the trust relationship is established, the settlor will lose ownership of the trust property, and the ownership will be split between the trustee as the legal owner and the beneficiary as the equitable owner to balance legal rights and interests.
A trust can accept a wide variety of asset types, including cash assets, overseas properties, overseas policies, company shares, gold and jewelry, artwork, aircraft, and yachts. Among them, assets such as company shares and properties usually involve more local regulations and tax matters, requiring customized arrangements based on the characteristics and situations of the relevant assets. Physical assets such as gold and jewelry, artwork, aircraft, and yachts involve the facilities and conditions of the trustee’s management service.
Through the transfer of asset ownership, trusts can achieve the following three functions:
Asset preservation
- Private safe deposit box, risk firewall
- By transferring asset ownership, the risk between individuals and property can be isolated.
Tax planning
- Change asset location, reduce applicable tax rates
- While changing the legal ownership of assets, change the tax jurisdiction of assets.
Wealth inheritance
- Stable wealth management, flexible wealth inheritance
- With the advantages of professional institutions, focus on sustained and stable value growth of wealth, while considering flexible targeted distribution.
Advantages of Trusts
Establishing an appropriate trust structure can protect the assets of the settlor and their family, safeguarding them from creditor claims.
Trust agreements do not need to be disclosed, providing beneficiaries with a high degree of privacy protection.
Compared with traditional wills, the inheritance process of trusts is faster, more reliable, reduces time spent on administrative and legal procedures, and avoids inheritance disputes.
The methods and timing of asset distribution can be adjusted according to different goals.
When setting up a trust, funds can be deployed in advance for investment purposes, and experts can be entrusted to manage trust investments to increase returns. Centralized asset management also improves the quality of reporting and decision-making processes.
Trusts are commonly used as tax planning tools and are widely applied in countries with high tax rates.