- to protect improvident beneficiaries against creditors – as the beneficiary has no claim to any specific part of the trust fund, none of the trust fund is vulnerable to attachment by the trustee in bankruptcy of any beneficiary
- to exercise control over young or improvident beneficiaries (i.e. just like the one set up by the late HK Singer Anita Mui)
- to create flexibility to react to changes in circumstances
- in certain jurisdictions, a discretionary trust can be used to protect family assets from forming part of any divorce settlement.
- Living trust vs testamentary trust
- A living trust is also known as an inter vivos trust. A living trust is one that takes effect during the lifetime of the settlor, which can either be revocable or irrevocable. In contrast, a testamentary trust (or will trust) is one that takes effect following the death of the settlor.
- Taxation of trust in the United Kingdom [read]
- Trust is not a tax-saving tool in the United Kingdom, but a living trust can avoid the probate process in the event that the settlor passes away.
- Domiciled vs non-domiciled resident [read]
- Statutory residence test (SRT) [read]
- UK resident property structures: what are the options? [read]
- A guide to US income tax treaties [read]
- I Got 99 Problems and They’ re All FATCA [read]