What is Trust? (4)

          Wills and Trusts are not mutually exclusive. Even those who are very wealthy are unlikely to transfer everything they have into a Trust during their lifetime. The Will then covers all residual assets that remain upon death. Hence, it is important to have both Will and Trust to form part of a proper comprehensive estate plan. We can say that a Will is a must, but a Trust is depending on your situation.

          We would recommend that it be revocable only by the Settlor but in some cases with the Settlor understanding the impact of granting such power to another person, a trust may be revoked by the Protector and/or beneficiary and/or third party.

          In the event that the Settlor exercises his power of revocation, the Trust will come to an end and the Trustee will be under an obligation to transfer all the assets of the Trust back to the Settlor.

          A irrevocable trust can be used in the following situations: 

1. For Muslims, such a Trust can be used to distribute the assets according to his wishes;
2. For the Settlor to have his assets distributed according to his wishes and protected from creditors subject to the provisions stated in the Bankruptcy Act 1967. This is because, in the event of the Settlor’s bankruptcy, all rights and powers exercisable by him in relation to the provisions of a trust deed, including the right to revoke the Trust, will be assigned to the Director General of Insolvency.

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