Chiny Liu, Principal Adviser
Although inheritance tax was abolished in Hong Kong since February 11, 2006, inappropriate arrangement or the lacking of estate planning can still cause unexpected financial stress and disturbance to your family members, in particular for those who are dependent on you for their daily supply. Your loved ones may have even got into financial predicament, before probate can be granted.
Estate Planning and Trust
Making decisions concerning the inheritance and/or distribution of wealth for those who have made a fortune is indeed very challenging. Nevertheless, if you can arrange properly before you depart from your earthly life about how you would like to distribute your wealth amongst your heirs, it can not only bring blessings to your loved ones while also avoid conflicts amongst family members.
For those who own a substantial fortune, the benefits of a trust can sometimes well dwarf its costs. A trust allows its settlor to manage and distribute his/her wealth during and also beyond his/her lifetime, according to his/her wishes. Unlike a will which is a public document and requires probate granted by court to enforce, trust is on the other hand private in nature, ideal for protecting your privacy and can be implemented by the trustee once set up.
As for irrevocable trust, assets being transferred into the trust are considered the property of the trust, with the trustee being the legal owner holding the assets for the benefit of the beneficiaries. Consequently, assets within a trust can be protected from any future claims against the trust’s settlor. Trust can therefore be an essential part of wealth management and protection especially for professionals who are exposed to professional liabilities and various business risks.
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