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Common trusts in Singapore and their pros and cons

A trust is a legal arrangement where two parties hold property simultaneously. The ownership of the property is held by two parties such that a trustee is entrusted with the legal title of the property while the other person, known as the beneficiary, retains an equitable title of the of the property in question. The person who creates the trust is called a settlor and is the original owner of the property.

Once a trust has been created, the trustee is given the authority to manage and administer the property on behalf of the beneficiaries. There are several types of trusts and each comes with its advantages and disadvantages.

Below are the common trusts in Singapore and their pros and cons.

 #1: Private Family Trusts

A private family trust is a trust that is created to facilitate the transfer of property to future generations or beneficiaries. It is a legal agreement that states how the assets will be distributed once the owner has passed on or is incapacitated. Private family trusts may come in the form a deed, a will or a declaration.

Pros :

  • It protects the settlor’s wealth – When the settlor transfers the ownership rights to the trustee, the properties transferred are protected against creditors, and do not form part of the pool of matrimonial properties when such disputes arise as well as exchange controls.
  • There will be no longer a need for probate proceedings as the settlor will have already appointed someone to manage and administer the assets on their behalf.


  • It is expensive

#2: Collective Investment Trusts

Collective investment trusts are trusts that are established for purposes of investments. They are normally operated by a trust company or a bank by handling a group of trust accounts. They include real estate investment trusts, business trusts, and unit trusts.

Pros :

  • There are few restrictions on these types of trusts.
  • They have certain tax benefits.
  • Capital required to invest is small compared to investing in property or shares.


  • They involve a number of risks.
  • There are some fees and charges payable that may make them expensive.

#3:  Charitable Trusts

Charitable trusts are trusts that are set up for charitable purposes. They do not benefit any specific persons.


  • Charitable trusts are exempt from compliance rules.
  • Administration of Charitable trusts property can be done by a Public Trustee.
  • They also get tax reliefs and exemptions.


  • Establishment of charitable trusts is very expensive and time-consuming.
  • The individual beneficiaries do not benefit directly from the trusts.

#4: Revocable Trusts

Revocable trusts are trust that can be cancelled (revoked) or terminated by the settlor. The settlor can also vary the terms of the trust instead of terminating it.


  • The settlor retains some measure of control over the property.
  • When the settlor has passed on, the property that they transferred to a trustee may not form part of their property.
  • The probate process is avoided.


  • The properties or assets under this trust is not protected against bankruptcy and creditors

#5: Irrevocable Trusts

Irrevocable trusts cannot be terminated or cancelled, nor can its terms be varied by the settlor. The trustee has full control over the management of the assets.


  • The assets will no longer form part of the settlor’s wealth upon his death.
  • The assets are protected against the settlor’s creditors in the event of the settlor’s bankruptcy.


  • The settlor will no longer have any right to the property given that this kind of arrangement is fixed and cannot be altered.

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