How to choose the right trustee

1. The concept of trust and trustee

According to the British common law description of the concept of trust, a trust refers to an agreement (trust deed) signed between one party (the settlor) and another party (the trustee). According to the agreement, the settlor transfers the legal ownership of the assets to the trustee, who is This asset is held in trust for the benefit of a third party (the beneficiary). The trustee will manage and distribute the assets in the trust in the interests of the beneficiaries with reference to the wishes of the settlor.

The trustee is one of the important subjects in the trust structure. It is a natural person or commercial entity that holds and manages property for the benefit of third parties. It is responsible for the custody of trust property and needs to proceed from the interests of the beneficiaries and in accordance with the trust contract and relevant The trustee assumes the obligations of the trustee according to legal provisions and properly manages the trust property.

The trustee's responsibilities include, but are not limited to, ensuring the security of trust assets, managing, investing and distributing trust assets with reference to the settlor's wishes, and promptly submitting trust-related information to relevant regulatory agencies as required.

2. What are the types of trustees?

For overseas trusts, those who are qualified to serve as trustees can usually be an overseas trust company holding a trust license, a natural person, or a private trust company (PTC) established by the trustor himself. However, based on the professionalism, stability, sustainability and other factors required for trustees to manage the trust structure, in practice it is usually recommended to choose a trust company holding a trust license as the trustee. Mainstream trust companies are divided into two categories: bank trust companies and independent trust companies.

1. Independent Trust Company

Independent trust companies have rich trust business experience and strong independence, professionalism and sustainability. The types of assets that can be held under the trust and the types of trusts that can be established are relatively diversified.

2. Banking trust company

Many large traditional financial institutions such as private banks provide fiduciary services to their private banking clients. Banking trusts are mostly part of private banks. They value customers' investment in their private bank accounts and are more inclined to hold their own accounts. The types of assets that can be held under the trust are relatively simple.

3. How to choose a trust company

Building a trust is an important way for high-net-worth individuals to achieve wealth management and inheritance. The whole process involves many links, including bank account opening, trust structure establishment, company secretarial services, etc. It is a systematic work. There are currently a large number of independent trust companies and bank-based trust companies on the market, and the company strength and service quality vary. Therefore, the trustor should carefully choose the trustee that suits him based on his own needs. When selecting suitable trustees, the following factors need to be considered:

1. Company background

• Whether the operation of the trustee and its parent company (if any) is stable, whether it has a certain revenue scale and a stable equity structure
• Whether the trustee holds a trustee license issued by the local regulatory authority

2. Team ability

• Are the team members senior and professional with rich business experience?
• Is the team management stable and the personnel sufficient?
• Whether team members have multi-lingual capabilities to communicate smoothly with customers

3. Service efficiency

• Whether the trustee team can respond to customer needs in various regions in a timely manner without being restricted by time differences
• Whether a convenient and efficient trust one-stop service plan is provided, and whether the supporting services are complete

4. Flexibility

• Whether the trustee has a high level of openness to acceptable asset types

5. Service charges

• Are trust service charges and other related charges reasonable?
• Is the payment process convenient and efficient?

Conclusion

Choosing the right trustee is a critical step in setting up and running a family trust. The professionalism, stability and service quality of the trustee directly affect the management effect of the trust and the interests of the beneficiaries. Therefore, when choosing a trustee, the trustor should comprehensively consider factors such as company background, team capabilities, service efficiency, flexibility, and service fees to ensure that the chosen trustee can meet its own needs and achieve the goals of wealth management and inheritance.

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.