Express Trust
An express trust is a trust created deliberately by a settlor, usually in the form of a written deed or declaration of trust. An express trust is created when the settlor makes it clear that they want to create a trust and identifies the trust property, the trustee, and the beneficiaries.
There are four essential elements of an express trust:
Certainty of intention: The settlor must have a clear intention to create a trust.
Certainty of subject matter: The trust property must be clearly identified.
Certainty of objects: The beneficiaries of the trust must be clearly identified.
Constitution: The trust must be properly constituted, which means that the settlor must transfer the trust property to the trustee.
Express trusts can be used for a variety of purposes, such as:
To provide for the financial security of minors or other dependents.
To manage the assets of a person who is incapacitated.
To protect assets from creditors.
To reduce estate taxes.
To support charitable causes.
Here are some examples of express trusts:
A parent creates a trust for their minor child, with the instructions that the trust property be used to pay for the child's education and other expenses until the child reaches the age of 18.
A person with a disability creates a trust to manage their assets and ensure that they have the financial resources they need to live independently.
A business owner creates a trust to protect their business assets from creditors in the event of bankruptcy.
A wealthy individual creates a trust to reduce their estate taxes and to leave a legacy to their children and grandchildren.
A philanthropist creates a trust to support a charitable cause that they are passionate about.
Express trusts can be complex legal arrangements, and it is important to seek professional advice if you are considering creating an express trust.
Trust Deed
A trust deed is a legal document that creates a trust. It sets out the terms and conditions of the trust, including the trust property, the trustee, and the beneficiaries. The trust deed also sets out the powers and duties of the trustee, and the rights of the beneficiaries.
Trust deeds can be used for a variety of purposes, such as:
To provide for the financial security of minors or other dependents.
To manage the assets of a person who is incapacitated.
To protect assets from creditors.
To reduce estate taxes.
To support charitable causes.
Trust deeds can be complex legal documents, and it is important to seek professional advice when drafting a trust deed.
Here are some of the key elements of a trust deed:
The trust property: The trust deed must identify the property that is being transferred to the trust. This can be any type of property, such as money, real estate, or securities.
The trustee: The trustee is the person or entity that will manage the trust property and distribute it to the beneficiaries according to the terms of the trust. The trustee must be someone who is trustworthy and reliable.
The beneficiaries: The beneficiaries are the people or entities who will receive the trust property. The beneficiaries can be individuals, families, charities, or other organizations.
The terms and conditions of the trust: The trust deed must set out the terms and conditions of the trust, such as how the trust property will be managed and distributed, and when the trust will terminate.
Once a trust deed is signed, it becomes a legally binding document. The trustee is responsible for managing the trust property and distributing it to the beneficiaries according to the terms of the trust deed.
If you are considering creating a trust, it is important to seek professional advice to ensure that the trust deed is drafted correctly and that the trust meets your specific needs and goals.
Drafting a trust deed
Drafting a trust deed is a complex legal process, and it is important to seek professional advice from an experienced advisor. However, here is a general overview of the steps involved:
Identify the trust property. What property do you want to transfer to the trust? This can be any type of property, such as money, real estate, or securities.
Identify the trustee. The trustee is the person or entity who will manage the trust property and distribute it to the beneficiaries according to the terms of the trust. The trustee should be someone who is trustworthy and reliable.
Identify the beneficiaries. The beneficiaries are the people or entities who will receive the trust property. The beneficiaries can be individuals, families, charities, or other organizations.
Determine the terms and conditions of the trust. This includes how the trust property will be managed and distributed, and when the trust will terminate. For example, you may want to specify how the trust property should be invested, or how often the beneficiaries should receive distributions.
Draft the trust deed. The trust deed is a legal document that sets out the terms and conditions of the trust. It is important to have the trust deed drafted by an experienced estate planning professional to ensure that it is legally enforceable and that it meets your specific needs and goals.
Sign and execute the trust deed. Once the trust deed is drafted, it must be signed by the settlor (the person who is creating the trust) and the trustee. The trust deed may also need to be witnessed by one or more people.
Fund the trust. Once the trust deed is signed and executed, the settlor must transfer the trust property to the trustee. This can be done by signing a transfer of ownership document, such as a deed or stock transfer form.
Once the trust is funded, the trustee will be responsible for managing the trust property and distributing it to the beneficiaries according to the terms of the trust deed.
Here are some additional tips for drafting a trust deed:
Be as specific as possible when describing the trust property, the trustee, and the beneficiaries.
Consider appointing a successor trustee in case the original trustee is unable or unwilling to serve.
Review the trust deed regularly to make sure that it still meets your needs and goals.
If you have any questions about drafting a trust deed, you should consult with an experienced estate planning professional.
Why Express Trust
There are many reasons why someone might choose to create an express trust. Some of the most common reasons include:
To provide for the financial security of minors or other dependents. Express trusts can be used to ensure that minors and other dependents have the financial resources they need, even if the settlor is no longer able to provide for them. For example, a parent might create a trust for their minor child, with the instructions that the trust property be used to pay for the child's education and other expenses until the child reaches the age of 18.
To manage the assets of a person who is incapacitated. If a person becomes incapacitated, such as through illness or injury, an express trust can be used to manage their assets and ensure that their needs are met. For example, a person with a disability might create a trust to manage their assets and ensure that they have the financial resources they need to live independently.
To protect assets from creditors. Express trusts can be used to protect assets from creditors, such as in the event of bankruptcy. For example, a business owner might create a trust to protect their business assets from creditors in the event of bankruptcy.
To reduce estate taxes. Express trusts can be used to reduce estate taxes. For example, a wealthy individual might create a trust to leave a legacy to their children and grandchildren, while also reducing the amount of estate taxes that their heirs will have to pay.
To support charitable causes. Express trusts can be used to support charitable causes. For example, a philanthropist might create a trust to provide funding for a specific charitable cause, such as research into a particular disease or support for education in a developing country.
In addition to these specific reasons, express trusts can also be used to achieve a variety of other goals, such as:
To provide confidentiality for the settlor and their beneficiaries.
To give the settlor more control over how their assets are distributed.
To create a flexible structure that can be adapted to changing circumstances.
To provide a framework for family governance.
If you are considering creating an express trust, it is important to seek professional advice to ensure that the trust is structured in a way that meets your specific needs and goals.
How to Create an Express Trust
To create an express trust, you must:
Have a clear intention to create a trust. This can be done by stating your intention in writing, or by making it clear orally to the trustee.
Identify the trust property. This can be any type of property, such as money, real estate, or securities.
Identify the trustee. The trustee is the person or entity who will manage the trust property and distribute it to the beneficiaries according to the terms of the trust.
Identify the beneficiaries. The beneficiaries are the people or entities who will receive the trust property.
Transfer the trust property to the trustee. This can be done by signing a deed of trust or other legal document.
Once the trust is created, the trustee will be responsible for managing the trust property and distributing it to the beneficiaries according to the terms of the trust. The trustee will also be responsible for paying any taxes that are due on the trust property.
It is important to note that express trusts can be complex legal arrangements. If you are considering creating an express trust, it is important to seek professional advice to ensure that the trust is structured in a way that meets your specific needs and goals.
Here are some additional tips for creating an express trust:
Make sure that the trust agreement is clear and concise.
Be specific about the trust property, the trustee, and the beneficiaries.
Consider appointing a successor trustee in case the original trustee is unable or unwilling to serve.
Review the trust agreement regularly to make sure that it still meets your needs and goals.
If you have any questions about creating an express trust, contact Bestar Trusty,
How Bestar Trusty can Help
Bestar Trusty is a trustee company that provides trustee services in Hong Kong.
Here are some of the ways that Bestar Trusty can help with express trusts in Hong Kong:
Setting up the trust: Bestar Trusty can help you draft the trust deed, which is the legal document that creates the trust. The trust deed will specify the trust property, the trustee, and the beneficiaries. Bestar Trusty can also help you transfer the trust property to the trustee.
Managing the trust: Bestar Trusty can manage the trust property on your behalf, including investing the assets, paying taxes, and distributing the income and principal to the beneficiaries according to the terms of the trust deed.
Providing oversight: Bestar Trusty can provide oversight of the trustee to ensure that they are acting in the best interests of the beneficiaries.
Here are some of the benefits of using Bestar Trusty to help with your express trust in Hong Kong:
Expertise: Bestar Trusty has a team of experienced professionals who are experts in trust law and administration in Hong Kong.
Convenience: Bestar Trusty can take care of all the administrative aspects of managing your trust, so you can focus on other things.
Peace of mind: Bestar Trusty is a licensed and regulated trustee company, so you can rest assured that your trust is in good hands.
If you are considering creating an express trust in Hong Kong, or if you need help managing an existing trust, Bestar Trusty can help. You can contact Bestar Trusty for a free consultation to discuss your specific needs and goals.
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