Trust in lieu of Will

[Dumb]

Need help on feedbacks and well as estimated legal cost involved.

 

I am thinking of setting up a simple Trust (irrevocable) on a HDB flat held under tenancy in common on half share basis..

 

My aunty wants to will her half share to me (with no conditions), but I may not be eligible as I am an owner of a HDB flat. The other half share belongs to her son who is not capable of managing his money and life. However, I have in mind a Trust in lieu of a Will which can be revoked or changed due to influence from others and also to avoid probate when my aunty up lorry.

 

In short, the intention is to realise the asset either before or after my aunty dies and distribute a certain sum of money to her son age 59 on a weekly basis from age 65 till the fund is exhausted. When the beneficiary dies, any balance fund will go to X in one lump sum, thereby terminating the Trust. No compensation for trustee.

 

Now awaiting for HDB's response on whether such a Trust is acceptable before I go see a lawyer.

 

Urgently need to settle this issue as my aunty has passed her 94th bd.

 

TIA.

[Sci10213]

I've just done a simple Will and also discussed with lawyer about having a Trust for my children. For Trust, it seems you can either do a Trust (standalone on its own) or "insert" a Trust clause in the Will.

 

One of the important considerations for making a Trust is: Who do you appoint as the Trustee?

 

A) Someone who you can trust of course - can be a friend or relative

In this case, does this person agree or not to be the Trustee because he/she has to administer the trust - may be time consuming. Also there is risk that that the trustee may not outlive the beneficiary, then you need also to name a 2nd trustee as backup.

And in your case, it may last for 6 years (age 65 - 59) .... who is so free to volunteer to do that honestly?

 

B) Outsource to trust company

Woo... the fees are in thousands + % of asset amount.... if your aunt has only HDB flat, which say worth $500,000... you pay the annual fees to trust company for 6 years... is it worth it? I feel trust is more suitable for people with total assets worth >>> S$1m...

 

A Will costs a few hundred bucks but a trust may cost thousands... its better for you to check around quotes for both....

in my case, I decided a Will is better in the end.

Edited June 16, 2015 by Sci10213

[Dumb]

I've just done a simple Will and also discussed with lawyer about having a Trust for my children. For Trust, it seems you can either do a Trust (standalone on its own) or "insert" a Trust clause in the Will.

 

One of the important considerations for making a Trust is: Who do you appoint as the Trustee?

 

A) Someone who you can trust of course - can be a friend or relative

In this case, does this person agree or not to be the Trustee because he/she has to administer the trust - may be time consuming. Also there is risk that that the trustee may not outlive the beneficiary, then you need also to name a 2nd trustee as backup.

And in your case, it may last for 6 years (age 65 - 59) .... who is so free to volunteer to do that honestly?

 

B) Outsource to trust company

Woo... the fees are in thousands + % of asset amount.... if your aunt has only HDB flat, which say worth $500,000... you pay the annual fees to trust company for 6 years... is it worth it? I feel trust is more suitable for people with total assets worth >>> S$1m...

 

A Will costs a few hundred bucks but a trust may cost thousands... its better for you to check around quotes for both....

in my case, I decided a Will is better in the end.

 

The Flat is held as tenants in common by mother and son. Son is ever ready to sell asap and quite certainly his share will be gone in no time and he will be homeless. I decided on an irrevocable Trust in lieu of a Will as my aunty has another son and daughter and the Will (naming me as beneficiary) may be revoked without my knowledge or it may be contested when she dies.

 

Half share of the Flat is not significant - about 150k. I will be the Trustee (without compensation) and my successors will be my siblings in a certain order. It is simple to administer as all the Trustee need to do is to disburse a certain sum of money to the beneficiary weekly until the fund is exhausted.

[Acemundo]

it is very noble of you. if it was me, I may still decline the appointment given that your auntie's sons and daughter may construe you as money grabber especially since you say they may contest the will. plus you said that one of the son will be ever ready to sell and encash and likely to lose their shelter. if the ultimate beneficiary don't cherish it, why should I waste my effort and suffer doubtful and dirty looks doing it?

 

 

 

The Flat is held as tenants in common by mother and son. Son is ever ready to sell asap and quite certainly his share will be gone in no time and he will be homeless. I decided on an irrevocable Trust in lieu of a Will as my aunty has another son and daughter and the Will (naming me as beneficiary) may be revoked without my knowledge or it may be contested when she dies.

 

Half share of the Flat is not significant - about 150k. I will be the Trustee (without compensation) and my successors will be my siblings in a certain order. It is simple to administer as all the Trustee need to do is to disburse a certain sum of money to the beneficiary weekly until the fund is exhausted.

 

[Dumb]

The son (who I decided is also the beneficiary of the Trust to be created) is staying alone in the flat held jointly with the mum. The mum is staying with the other son and her daughter has migrated. My aunt wants a Will naming me as the beneficiary without condition. But I don't want to be seen as benefitting from her Will. Hence I thought of a Trust to return the benefit to her son solely in instalments. Otherwise, the money from the disposal of the flat will be gone in no time. I believe an irrevocable Trust will not be affected when my aunt pass away, with or without a Will.

[Little_prince]

The son (who I decided is also the beneficiary of the Trust to be created) is staying alone in the flat held jointly with the mum. The mum is staying with the other son and her daughter has migrated. My aunt wants a Will naming me as the beneficiary without condition. But I don't want to be seen as benefitting from her Will. Hence I thought of a Trust to return the benefit to her son solely in instalments. Otherwise, the money from the disposal of the flat will be gone in no time. I believe an irrevocable Trust will not be affected when my aunt pass away, with or without a Will.

Sounds similar to my dad case. But honestly it's not worth the hassle. No one will appreciate your efforts. End up relatives also 翻脸

[Dumb]

Sounds similar to my dad case. But honestly it's not worth the hassle. No one will appreciate your efforts. End up relatives also 翻脸

 

To me there is no hassle except the legal fee to create a Trust.

 

Now I give up on a Trust and will just go for a Will in which I will be named beneficiary. The lawyer wanted 8k when the half of the Flat is no more than 150k. Also HDB just replied that they do not allow Trust unless minor is involved.

 

Case closed. Ty.

[Acemundo]

wanted to ask, the lawyer wanted 8k to do the trust or the will? sounds like very expensive charges for either one .

 

To me there is no hassle except the legal fee to create a Trust.

 

Now I give up on a Trust and will just go for a Will in which I will be named beneficiary. The lawyer wanted 8k when the half of the Flat is no more than 150k. Also HDB just replied that they do not allow Trust unless minor is involved.

 

Case closed. Ty.

 

[Sci10213]

wanted to ask, the lawyer wanted 8k to do the trust or the will? sounds like very expensive charges for either one .

 

definitely 8k is for the trust ... u go check in market ... for this sum of money involved, a will does not cost $800...

 

can just add in special clauses in the will as to how the money is to be handled.

[serenade]

I presume your aunt intends to leave her half-share of the HDB flat to her son. But as cannot trust him to manage, wants you to manage the asset for him. When your aunt's cash runs out, you will dig into your own pockets to give money to her son every week. The share of the flat left to you is the collateral for the cash you fork out in advance prior to the eventual sale of the flat years down the road.

 

Your aunt's Will which will cost a few hundred dollars to make, should state that the half-share of flat is left to you and her son stays as long as he lives (you will need this in order for HDB to allow you to have >1 flat at same time in your name). And $xxx in cash goes to you to be distributed to her son over time. Your Aunt can name you as the Executor of her Will, or another trusted party as Executor. To be the check and balance for your actions. Good to have this despite your good intentions, to be transparent to all relatives and beneficiaries of your Aunt's Will.

 

You set up a separate bank account from which all disbursements to son are made from, and all capital injections of cash by you are traceable.

 

When the day your aunt's flat is sold comes, you as Executor (or the Executor of your own Will, in case the son survives you) will reimburse you or your estate for the capital injections you made over time from the sale proceeds based on bank statements of capital injections. Your own Will should state that you have monies due from the sale of your aunt's flat.

 

In case the son survives you, you also have to think who can take over the operations of this account to continue disbursements till funds run out or the son passes away.

 

Agree with others that setting up a formal trust is too costly and cumbersome for the amounts involved. A precise Will for your aunt and for yourself is the way to go.