AVA WEALTH
Consultancy
What is a Trust?
Trust is a legal arrangement where the settlor transfers asset ownership to a trustee, who manages it for the benefit of beneficiaries. Beneficiaries hold an equitable interest, while the trustee has legal ownership. Trusts serve various purposes like education, charity, generational wealth, creditor protection, and investment.
Types of Trust
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Living Trust
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Testamentary Trust
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Private Trust
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Single Parent Trust
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Insurance Trust
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Special Child Trust
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Family Trust
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Golden Age & Healthcare Trust
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Charitable Trust
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Investment Trust
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Property Trust
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etc
Trust
Why need to set up a trust?
A Trust benefits one or more beneficiaries and focuses on preserving capital, unlike a Will. While beneficiaries enjoy the income from the Trust, the capital remains intact for long-term use. In cases where both parents pass away, leaving behind minors who cannot manage assets, a Trust ensures their financial security.
Clients often set up a Trust to secure quick asset distribution, particularly for their spouse and children, without the delays of Probate, which can affect minors' basic needs, education, and living expenses.
6 terms that you need to know before setting up a trust
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Settlor - the one that set up the Trust, the owner of the Trust
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Beneficiaries - the people whom you wanted them to benefit from the assets
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Trustee - the party (person/ corporation) who handle and manage the Trust
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Protector - monitors the practices of trustee and advises the trustee on the needs of the beneficiaries, watching over the benefits of the beneficiaries when the owner is no longer around
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Trust Asset - the assets inside the Trust
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Trust Period - how long you want the Trust to last for
Can I determine the trigger event for the Trust to kick in?
Yes, normally there will be three types of trigger events. First is upon death, second is TPD, coma or mental disability and third is a critical illness.
What kind of assets that you can put inside your Trust?
It can be shared in a private limited company, landed property, bank accounts, unit trust, investment accounts, and life insurance.
How can the Trust period be determined?
You can have the Trust ends after several years like after your youngest surviving child reaches 25 years old or after the death of a particular person.