A trust is a legal relationship involving the Settlor transferring property (eg assets like cash, land, houses etc) to the Trustee (individual & company), to be held and managed for the benefit of the Benefuciaries (Settlor can be one of the beneficiaries).
With the explosion of wealth in many Singaporeans and delays in marriages & having children at later age, trust-an instrument to conserve your assets to your next generation (special needa, spendthrift or inexperienced in financial dealings) is necessary. Trust can also provide confidentiality to reduce conflict within the family.
How to create a Trust in Singapore?
You can have a testamentary trust in your will, which comes into existence on the date of death. The cost is minimized as it will be based on the number of clauses in your will. Average cost of a will with testamentary trust is $550. Refer to will-writing fee here.
You create this estate planning tool while one is alive, rather than one that is created after death. Living trust allows transfer of property including house, car, cash, insurance, investment to a separate entity. A will can be set up to ‘pour over’ other assets into this trust at the time of death. It is an arrangement under which the trustee holds legal title to property for your beneficiaries. Setting a living trust saves your beneficiaries hassle, money & time as it avoids probate and efficiently distributes your assets for your dependents.
Are you concern of your investment positions upon your demise? Do you wish your beneficiaries can continue investing (unlike an estate investment account which allows only selling off existing positions)?
Are you concern that trustees are not performing their duties for your minor beneficiaries? Your trusted friend or relative can be appointed as Protector to give consent for certain actions like distributions to beneficiaries or appoint a new trustee.
Different kinds of living trusts (minimum trust acceptance fees from $3,600) to suit your needs:
Annual Administration Fee for Trust
The annual admin fee for estate on movable assets is as follows:
|Value of Movable Assets||Charges & Minimum Fee|
|Below S$1 million||0.5% (min S$3,000)|
|Above S$1 million to S$3 million||0.4% (min S$5,000)|
|Above S$3 million to S$6 million||0.3% (min S$12,000)|
|Above S$6 million to S$10 million||0.2% (min S$18,000)|
|Above S$10 million||0.1% (min S$20,000)|
The fee for immovable assets is 5% of gross annual rental income/ market rental that the property is reasonably expected to fetch subject to a minimum of S$3,000 per title/lot.
All fees are before 7% GST.
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