Family Succession Trust
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Family Business requires Asset Protection Structure & Family Governance Structure.
a) Important to know to Family Business – General Information on Family Private Trust Company (PTC)
1. For Family Business : INTRODUCTION to Family Private Trust Company for Family Business
A corporation with sole purpose of acting as trustee of a family trust where the settlor and his beneficiaries are connected or family members
- An exempt entity under the Trust Companies (Exemptions) Regulations 2005, where trust business license is not required.
- Family Private Trust Company (“PTC”) is prohibited from soliciting trust business from or provides trust business services to the public.
- Specific regulations requiring appointment of a licensed trust company to ensure compliance with anti money laundry practices.
2. For Family Business : OBJECTIVES of Family Private Trust Company for Family Business
- Succession of wealth within families, family businesses.
- Asset protection against business creditors.
- Avoidance of assets division in relation to divorce and family feuds.
- Holding various companies and businesses under the umbrella of a trust holding.
3. For Family Business : BENEFITS of Family Private Trust Company for Family Business
Economic and costs minimization.
- Management efficiency.
- Avoidance of Probate and costs and delays in transfer at death.
Succession and inheritance.
- Business continuity and succession.
- Allows settlor to maintain full control until his time comes.
- Multi-generational trusts.
- Trust dictating beneficiary behavior.
Wealth preservation and investment.
- Keeping wealth in the family
- Investment and accumulations
Maintenance and provisions for family members.
- Provisions for disability and elder members.
- Life insurance payouts.
- Provisions in marital split up.
Asset Protection and potential adversity.
- Business risks.
- Creditor action.
- Divorces (fears of child’s failed marriage)
b) PROPOSED STRUCTURE for Family Business(example)
Family members to be appointed on the Board to manage the PTC and underlying companies.
Illustration of Individual Trust Administered under Family Private Trust Company
c) For Family Business: SETTING UP AND ADMINISTRATION OF FAMILY PRIVATE TRUST COMPANY
1. Incorporation Private Trust Company (PTC) for Family Business
- To advise the name of PTC
- To advise the shareholders/ members.
2. Management of the PTC and underlying companies.
- To advise on the appointment of the team of professional managers.
3. Special Memorandum and Articles of Association.
(restrictions and non-solicitation of other business, shareholding restrictions etc)
4. The trust deed(s).
- Retirement Trust
- Multi-Generation Distribution Trust
5. PTC Operation Manual.
- Management of the Settlement.
- Operation, controls and auditing.
- Trust administration and fiduciary responsibilities.
- Compliance, anti-money laundering.
- Requirements under the Trust Companies Act and other statutes.
6. Appointment of corporate secretary.
7. Appointment and agreement with professional directors.
8. Appointment of trust company to ensure compliance.
9. Appointment of Accountants/Auditors.
10. Appointment of Investment Adviser.
11. Appointment of Property Manager.
1) For Family Business: SETUP FEES OF PTC
PTC & Retirement Trust: S$10,000 – S$12,000 *
* Inclusive of the following:
- PTC Operation Manual.
- Incorporation of the PTC (inclusive of disbursements).
- Special Memorandum and Article of Association.
- Set up of Retirement Trust.
For Family Business: Multi-Generation Distribution Trust: S$3,000 – S$5,000 per Trust
2) Annual Maintenance Fees of PTC
- Adviser Fee – S$4,000 per annum
- Corporate Secretarial Fee (inclusive of named Secretary) – S$1,500 per annum
- Audit & Tax Agent Fee – To be advised