Will

Trust

• A will is a declaration containing a person’s (testator’s) intentions regarding the distribution of his assets after his death.

• A trust is a legal arrangement in which the settlor authorises a person (known as ‘trustee’) to hold his assets for the benefit of beneficiary.

• An ‘executor’ is a named individual who will carry out the instructions in accordance to the testator’s wishes in the will. The executor does not hold legal title to your assets in his own capacity.

• The trustee is the legal owner of the property subject to the trust. The trustee has the obligation to manage to trust property for the benefit of the beneficiaries.

• A will becomes effective only upon the death of the testator.

• A trust can come into effect before the death of the settlor, the moment the asset is transferred to the trustee.

• A will must undergo the process of probate. (i.e. a grant for the executor to administer the estates of the deceased)

• A trust does not undergo through probate.

• Instructions in a Will are not limited to distribution of legal assets. A Will is also used to assign legal guardians for your children (minor), as well as setting out instructions on how your debts and taxes will be settled.

• Trust only involves instructions regarding the distribution of your legal assets. You do not use a trust to assign guardians to your kids. However, you could assign a Trustee to manage your funds or other assets on behalf of your children (minor) until they reach legal age.

• A Will covers every single asset that you own. For example, if you own five houses, you would have to include all five houses in your Will, as to who will inherit each house, and what happens if the intended beneficiaries died before you.

• You don’t necessarily have to include every single asset that you own. For example, if you own five house, you could choose to include only one home in your Trust.

As an additional note:

• Anyone can write their own Will, but one should take note of the provisions of the Wills Act 1959. Any non-compliance of the said Act will render the Will invalid and unenforceable. Subsequently, the distribution of assets will follow the Distribution Act 1958, which may not be in accordance with the wishes of the deceased. To avoid your loved ones having to go through messy legal entanglements, you may want to seek legal advice to have a properly drafted Will.

• While it is entirely possible to write your own Trust, it might be good to consult professional advice. Why? Because if you fail to clearly define the powers and abilities of your Trustee, you might find yourself and your beneficiaries in a vulnerable position.

Hope you find this article useful for your estate planning!