How Trusts are Generally Structured in Hong Kong
Trust Basics in Hong Kong
A trust is a legal arrangement where one party (settlor) transfers assets to another party (trustee) to hold and manage for the benefit of the settlor or other beneficiaries (recipients). The trustee holds legal ownership, while beneficiaries have beneficial ownership.
Key Players in a Hong Kong Trust
Settlor: Creates the trust and transfers assets.
Trustee: Holds and manages the assets according to the trust deed's terms.
Beneficiary: Entitled to benefit from the trust's assets.
Example
1.Settlor informs Bestar Trusty of wishes
2. Bestar Trusty creats a trust deed
Bestar Trusty as Trustee
Trustee manages and administers the Trust
3. Bestar Trusty sets up a Holding Company
4. Settlor transfers assets to Holding Company
Possible Trust Assets:
Deposits
Investment portfolios
Shares of asset holding companies
Insurance policies
Real estate (in certain jurisdictions)
5. Trustee distributes income/capital to Beneficiaries
Examples of Beneficiaries:
Settlor
Spouse
Children, grandchildren and future descendants
Charity
Any other person(s) who the Settlor wishes to name
A Protector may be appointed to provide oversight over the Trustee and/or to have certain powers over the trust.
Here are some additional things to consider:
Types of Trusts: There are various trust structures, each with its own purposes (e.g., discretionary trusts, purpose trusts).
Trust Deed: A well-drafted trust deed is essential to ensure the trust functions as intended.
Remember, this is just a general overview. Consulting a professional in Hong Kong familiar with trusts and your specific situation is recommended.
Benefits of a Hong Kong Trust Structure
Asset Protection: Can shield assets from creditors or future claims.
Estate Planning: Ensures assets are distributed as per the settlor's wishes.
Tax Advantages: May offer tax benefits depending on the trust structure and beneficiaries' residence.
How Bestar Trusty can Help
How is a Trust Structured
Seeking Professional Help
For specific advice on how Bestar Trusty can help you establish a trust in Hong Kong, consult with us. We can explain our services and how a trust structure would meet your needs.
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