Trust planning Singapore

Purchasing a property trust for children proves to be an excellent legacy planning tool. Parents should seek professional advice and assistance from trust planners for incorporating relevant and appropriate terms for their purposes in the trust document.

This article is an Introductory guide for helping you understand how to set up a property trust in Singapore.

Read Carefully.

• What is a Trust?

A Trust is a legal arrangement that involves the owner (“the settlor”) entrusting another party (“the trustee”) with looking after their assets for the beneficiaries the settlor selects.

Property trusts or trusts linked to real estate involve the holding of property assets left behind by the settlor, which they regard as being highly valuable, hence why they do not wish for the disposal of said property/properties after their death.

A trustee is responsible for monitoring and managing the trust’s assets for a trust, corporation or an individual chosen by the settlor, who carries out the instructions as stipulated in the trust.  

It is the trustee’s fiduciary duty to act in the best interest of the beneficiaries.

• What kind of assets can be held by the trustee?

Remember that a variety of assets can fund a trust, be it properties, cash, art collections, important documents, etc. A Trust can hold anything and everything the settlor owns.

A Property Trust specifically can hold both residential properties and commercial real estate. It is able to hold all properties legally owned by the settlor. However, joint ownership properties require written consent from the joint owner.

Property trusts are ideal for safeguarding hard-earned property assets from potential creditors and assuring that the needs of the children of future generations are taken care of, in the event of bankruptcy or a lawsuit.

• How much does it cost to set up a trust?

The trust cost varies widely and depends on the complexity of the arrangements and selection of law firms or trust and estate planners. The cost of setting up a trust can range from a few thousand dollars to $20,000 or more. Maintenance fees for the trust are also required.

For property trusts, the trustees assess their responsibilities depending upon the property value. 

Situations Where Trusts can be useful

• Taking care of a child with special needs

Parents or families with special needs children must indeed consider setting up a property trust. The trust can distribute funds that ensure that the child receives continuous financial support even when the parents are not around.

Apart from this, the parents or family members who have set up the trust can also avoid placing legal and financial responsibilities on other family members or relatives.

• Delaying gifts for vulnerable family members

Not all of our loved ones are great at handling financial valuables.

If you leave them wealth and money, it’s possible that they might not be able to handle the sudden increase in their finances and can even become bankrupt within a short time.

The best solution for such situations is to structure how your gifts are made and distributed among vulnerable family members.

Setting up a trust allows you to decide whether your loved ones, spouse, young children, parents receive a monthly amount or staggered payouts at different stages.

The choice is yours.

• Buying real estate for children

More than being self-sufficient, parents always think about the next generation and how they can provide for them.

Setting up a property trust containing valuable real estate assets is an ideal option.

In Singapore, creating a property trust is not solely for escaping the Additional Buyer’s Stamp Duty (ABSD). 

It is also for the crucial purpose of providing children, or future generations, with financial and legacy assets.

Trust Planning Singapore

Lighthouse Legacy Planners offer a holistic approach to trust planning, helping clients build legacies that can be passed on to their children and future generations.

Our trust planners help our clients understand what they want, and put them into a wish letter. Our vision is to create value-driven trusts that always benefit your families.