Legacy planning singapore: knowing how to “trust” your wealth
Using Trusts in your legacy planning Singapore
By now, most people would know that making a will is an essential step in term of legacy planning Singapore and disturbing our wealth according to our wishes. But will alone is not enough for your wealth preservation and wealth distribution in your financial journey. This is normally done after you have done your retirement planning as part of your wealth management.
You may check out more details on retirement planning in the articles below.
- How retirement blueprint helps one of my clients retire 5 years earlier than expected
- How to plan for retirement in Singapore ( 3 things you can’t do without)
- Retirement Planning: Tips On Making Full Use Of Your CPF
- Smart Retirement Planning Tips
- How much do we need to retire in Singapore
Other things like Lasting power of Attorney, Advance Medical Directive are also important in the event when we lost our mental capacity or when terminal illness strikes. And course some setup trust for a variety of reasons, a good example will be for their special needs children.
A trust may be appropriate if a person would want to avoid probate formalities and freezing of his assets after he passed on, to provide his dependants yet at the same time protecting his hard-earned assets from creditors or potential spendthrift dependants.
What is a Trust?
A trust is simply a legal arrangement where settlor places his assets into a trust for the appointed trustee to manage for the beneficiaries who normally are family members, friends or even charitable bodies. Assets that places into the trust an be property, cash, investment, family businesses. The settlor can have specific instruction listed in the trust document for the trustee to manage the assets in term of protection and distribution. In some case, a protector can be appointed by the settlor to safeguard the trust to prevent the trustee from abusing the powers.
mains reasons for setting up a trust
Creditors– Business owners who are exposed to debt risks due to the nature of their business or even investment. A trust then can protect his personal assets from his creditors. The trustee will be the legal title holder of the assets under the trust hence serve as a protection from the creditors to get access to the assets.
Wealth preservation and wealth distribution– By using a trust, the assets can be preserved for the future generation even for beneficiaries who have yet to exist at the time when the trust is set up. This would allow the assets to be consolidated at one place for administration and preservation of the growth potential. Instead of spreading the assets to his beneficiaries.
Using the trust also allows assets to be distributed to beneficiaries who are deem of incapable of managing their own finances in the eyes of the settlor, without worrying the money will be poorly managed.
Tax purpose – Using trust, the settlor can protect his assets from being taxed to channel asset income or project to family members who are on lower income tax brackets. Another way to use trust is to protect assets from capital gains or estate tax that may be applicable in other jurisdictions.
Legacy planning is the gift of love to your beneficiaries.
Trust can be a useful legacy-planning tool especially if one has vulnerable beneficiaries. If you want to have your wealth preserve and distribute based on wishes and do not know how?
Reach out to us and get back to you.