[Trust] A powerful shield to protect assets︳Debt prevention, high privacy, tax reduction, global investment, wealth inheritance︳Bago talks about trust

Disclaimer: The content of this article is not investment advice and does not constitute any invitation, solicitation or recommendation for investment products. This information is for general reference only.

"Trust" is not just for the rich, it also benefits the middle class and the general public.

In daily news reports, we often see wealthy people setting up trusts. This can easily make people mistakenly believe that "trusts" are only for the wealthy. In fact, as a middle class person or an ordinary person, by establishing a "trust", you can manage and protect assets like a wealthy person, and the threshold is not as high as imagined.

What is a trust?

Trusts are often considered very complicated, but in fact, they are just legal arrangements that help clients enhance asset protection, flexibly arrange tax matters, and pass on wealth. When the founder signs a trust contract with the trust institution and transfers the assets held to the trustee, the trustee will hold and manage the assets for the beneficiary in strict accordance with the trust contract and the letter of wishes and in the best interest of the beneficiary. .

You may be wondering, why should you hand over your assets? Will I suffer a loss after handing it over? It may seem like this on the surface, but if you have a wide variety of assets and high value, the issues that need to be considered are not just as simple as putting money in a safe, but how to protect the assets and pass them on to the next generation thoughtfully. This cannot be accomplished with a will, but requires a "trust", a safe, flexible, and powerful legal tool recognized by the world.

Benefits of setting up a trust

1. Provide a higher level of legal protection than banks

Trusts are legally independent. When you transfer assets to a trust institution, these assets no longer belong to your personal name, but are held in an independent trust. The purpose of such "asset separation" is that when you unfortunately encounter a debt dispute or even the company faces bankruptcy and liquidation, the trust assets will still be protected by law and will not be included in the scope of liquidation. In addition, since the trust has designated beneficiaries and benefit scope, even if the founder's marital relationship or family relationship changes, the independence and complete inheritance of wealth will not be affected.

2. Privacy is priceless and assets are kept confidential

Traditional wisdom tells us that "wealth should not be revealed." When a person has a certain amount of wealth, it becomes particularly important to "keep a low profile" to avoid unnecessary troubles. When the founder transfers assets to the trust, all transactions will be conducted in the name of the trustee. Every transaction and investment in the trust, as well as the assets owned and the amount of assets, are protected by trust laws. The trustee needs to fulfill its legal duty of care and keep the contents and terms of the trust deed strictly confidential so that your assets are hidden from public view.

3. Legally reduce tax burden

Many places in the world have high tax rates and complicated tax systems. In addition to income tax and profits tax, there are also capital gains tax, inheritance tax, and global tax. For example, the gift tax and inheritance tax rate in the United States is as high as 40%, and the capital gains tax rate in the UK is as high as 28%.

Due to the unique legal status of a trust and its confidentiality, after the founder transfers assets to the trust, the assets no longer belong to the individual's name, and a large amount of personal tax can be legally reduced. Moreover, through trusts, the founder can flexibly allocate assets to different jurisdictions to enjoy tax exemptions in different regions.

4. Invest globally as an institution to increase wealth

Different financial regulatory agencies around the world have imposed many restrictions on individual investors, such as restrictions on participation in transactions such as financial derivatives, structured products, and digital assets. Since trust assets can be legally allocated in global entities and financial markets and seek a wide range of investment opportunities, once a trust is established, it can act as an institution and break down investment barriers for individual investors.

Depending on the type of trust established, when establishing the trust, you can designate yourself or another person as the investment manager to directly manage the investment decisions of the trust assets. If you are one of the beneficiaries, you can also ask the trust to distribute your due assets and retain your right to invest in the trust assets while enjoying legal protection.

5. Personalized wealth inheritance, rich for three generations

The trust can flexibly set various terms according to the requirements of the founder, such as setting time limit, asset distribution method, disposal of property in emergencies, etc., and can be adjusted during the trust duration according to prior agreement.

For example, before Anita Mui passed away, she established a trust to protect her gambling mother in her old age. The trust stipulates that during the lifetime of Mui's mother, the trustee will allocate HK$70,000 to Mui's mother every month. After Mui's death, all remaining property will be donated to Wonderland Buddhist Association Co., Ltd. Even though Mei’s mother has gone through legal proceedings many times, hoping to claim all the inheritance at once, due to the extremely high legal effect of the trust deed, it is difficult to overturn it in the event of legal proceedings. Therefore, the rich have chosen trusts instead of wills. To ensure that future generations live a worry-free life.

How to choose a trust institution?

When choosing a trust institution, you should consider its professionalism and credibility. A good trust institution should have rich trust management experience and cooperate with many banks and financial institutions around the world to provide comprehensive financial services.

Trust institutions should be able to provide high standards of legal protection and provide customers with a variety of financial tools through a one-stop financial technology platform to meet customers' multiple needs in asset protection, asset appreciation and flexible use of assets.

After establishing a trust, the client's assets will receive solid legal protection, including but not limited to global currencies, securities, company shares, real estate properties, insurance, precious metals, vehicles, luxury goods, digital assets and NFT, etc. In addition, through the global financial network and high-privacy unlimited credit cards, customers can manage trust assets more efficiently and achieve true wealth independence.

If you have needs for asset segregation, tax planning, high privacy consumption, offshore banking services, investment and financial management, and global payments, please contact us for more information.

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Disclaimer: The content of this article is for reference only and does not constitute investment advice or an invitation, solicitation or recommendation for any investment product. Readers are advised to make their own judgment and seek professional advice.

The content of this article is purely the author's personal opinion and does not represent the position of 852FIN.

852FIN reminds readers that the content contained in this article mainly comes from online public information and does not constitute any professional advice. Readers should seek professional advice if they have specific questions about the establishment and management of trusts.

852FIN and the author of this article are not responsible for any loss or damage caused by the information contained or omitted in the article.