The trust is a centuries-old English law concept whereby one party holds title to assets for the benefit of another party. The terms of that arrangement are set out in a trust deed. Trusts can be used for a variety of purposes. These include:
 
Dynastic family wealth planning. Trusts can be used to ensure that future generations are not easily able to waste the assets accumulated by former generations.
 
Tax minimization. Trusts are typically more flexible than corporation and often provide enhanced opportunities for structuring to achieve legitimate tax advantages.
 
Privacy. Unlike corporations there are no “register of members” etc. and the use of facilities such as discretionary classes of beneficiaries can provided additional privacy.
 
Asset protection. Trusts are a way of protecting family assets from the claims of future creditors.
 
Outside of the English law jurisdictions such as Hong Kong and Singapore , trusts are generally not well understood in an Asian context. However in an emerging post Asian crisis world they are very relevant to Asian entrepreneurs wishing to avoid repeating the mistakes of the mid 1990’s .They may also be very relevant to expatriates living in Asian for both domestic and repatriation tax planning.
 
An illustration:  Private of professional Trustee

1. The client establishes a trust by transferring a nominal sum to a 3rd party trustee or its own special purpose trustee company.
2. A protector is appointed to the trust who is typically a family member and usually has the ability to hire and fire a trustee if he is dissatisfied with trustee.
3. The client and his family are appointed as either named beneficiaries or as members of a discretionary class of  beneficiaries of the trust. In that position they are able to enjoy financial benefits from  the trust provided ,however, there are no creditors threatening the client or his family.
4. The trust sets up and capitalizes an underlying IBC(perhaps BVI)using the nominal settlement. Usually the client or a nominee of the client is a director of the IBC which enables the client to retain a measure of control over the assets whilst not having legal title to them. The clients' appointment as a director is terminated by the trustee in the event of any creditor threat to the client or his family.
5. The client contributes assets to the trust and these are held by the IBC.
 
WHAT IS ACHIEVED WITH THIS STRUCTURE?
As the assets are no longer “owned” by client (albeit he can benefit from them ),there may be tax advantages to be gained in the client’s home jurisdiction. Indeed in the case of expatriates there may even be further advantages when they decide to return to their home jurisdiction .
 
Privacy －the assets are neither under the client’s name nor legally owned by him. He may be able to enjoy benefit from the assets but they do not belong to him.
 
Asset Protection－ As the assets do not belong to client and they are not available to meet his creditors claims.
A lot of heartache could have been avoided by Asian clients during the Asian crisis if they had established a trust structure before they encountered their solvent problems . It is important to note that this structure can only be legitimately and effectively used by a client at any time when he is solvent . As entrepreneurs recovered from the wounds of the late 1990’s now is the time to ensure that their assets are held in a secure and appropriate structure.