BANK of Singapore shares some examples to illustrate the flexibility of trusts and the extent to which the vehicles can be used to accommodate multi-jurisdictional and personal needs and perpetuate family values.
Solution: A trust with five sub-funds was set up, one for each of the five children. Different distribution conditions were specified for different children given the age disparity.
The sub-funds for the married children focused on medical and living expenses. The sub-funds for those who are still studying included clear requirements for the children to complete their university education and obtain gainful employment.
"Such detailed plans ensured that there was no in-fighting among the family members upon the patriarch's death," said BOS managing director and head of wealth planning, trust and insurance Lee Woon Shiu.
Solution: The trustee was required to verify with the trust Protector (often a senior family member) that all the children and grandchildren show up on the Qing Ming Festival (the Chinese festival to honour the dead) to pay respects to all ancestors before they receive their share of the annual income generated from the trust assets on the birthday of the patriarch after his death.
There was also a provision for the trust assets to set up an entrepreneurial fund to encourage the heirs to set up their own businesses. Specific details were set out on the establishment of a committee of Protectors comprising senior family members. An independent professional appointed by the family members will evaluate the business plans of deserving beneficiaries.