Family offices, private trust companies and trust integrity issues: Problems and solutions

Publication Type

Book Chapter

Version

submittedVersion

Publication Date

12-2022

Abstract

In recent years, the increasing prevalence of ultra-high net-worth individuals (“UNWIs”) in Asia has placed the actions and choices of this new class of financial elites and their affairs in the spotlight. In this chapter, we consider the common structures used in Family Offices and Private Trust Companies (“PTCs”) used by the ultra-wealthy, focusing on the composition of their management. Several family governance issues commonly arise in practice, such as control and management, duties owed by the managers, succession planning, and how to resolve possible conflicts between beneficiaries. These must be evaluated when considering the structures to adopt. In addition, where settlors attempt to retain considerable control over the trusts (for example, through “double hatting”), trust integrity issues may arise, raising risks of trusts being treated as sham or illusory trusts. We propose several solutions to resolve the family governance and trust integrity issues highlighted in this paper, including focusing on the importance of proper administration, succession planning and employing professionals with good trusts experience to assist in management. We will also explore the use of the Singapore Variable Capital Company for family office structuring.

Keywords

Family Offices, Private Trust Companies, Private Client Law, Trusts Law, Family Governance

Discipline

Business Law, Public Responsibility, and Ethics | Business Organizations Law

Research Areas

Private Law

Publication

Trusts and private wealth management: Developments and directions

Editor

Richard Nolan, Tang Hang Wu and Yip Man

First Page

1

Last Page

18

ISBN

9781316518021

Publisher

Cambridge University Press

City or Country

Cambridge

Copyright Owner and License

Authors

Link to Full Text

Share

COinS