The Trust Structure

Trust is one of the Powerful Estate Planning Tools. It is use to provide preservation, distribution and protection of wealth. Every Trust is tailor made to fulfill your wishes and objective. Three parties will form up in the Trust. There are,

1) Settlor ( Settlor is the person who transfer the rights and possession of the property owned by him)
2) Trustee (An individual or organization which holds or manages and invests assets for the benefit of another)
3) Beneficiary ( A person entitled to an advantage, benefit, or profit such as an inheritance under a will or the proceeds of an annuity, insurance policy, or property held in trust).

There are two common trust, Living Trust and Testamentary Trust which you can use it in your estate planning effectively.  Living Trust can be revocable or irrevocable. The Trust will take effect upon signing the trust deed and when certain conditions occur, the trust can be executed  immediately without delay where Testamentary Trust will only be able to execute or take effect after the death of the testator.


Trust is a great protecting tools in your financial planning especially if you wish to protect a specific group of beneficiary. The fact that you could not denied is when a person died, all his/her assets will be frozen including liquidity assets in the bank. If it is with will, the process of going through the applying Grant of Probate (GP) will take 6 months to 2 years and if it is without will, it will takes maximum of 6 years ( provided no other issue) for the whole process.


The best solution is to establish a TRUST. The money in the TRUST fund can be used immediately. The trust fund is separated from the estate of the testators, it is not belong to the estate. Trust fund source can be from Life insurance, Unit trust, Marker shares or Cash on hand. Usually, Life Insurance is recommended as it can provide cash in the shortest time to the dependents. 


TRUST provide perfect protection as it can protect against spendthrift beneficiaries, protect against beneficiaries creditors, protection against Settlor's creditors Protection from claim in a divorce. 


Trust give a complete protection to your Insurance beneficiaries, it benefits everyone in the trust. If you have already purchased an insurance policy for your loved ones, please do consider Insurance Trust to make it a complete protection. It has a missing piece in your insurance planning if without Trust.