What Makes Us Unique?
Generations-ASIA is a consultancy that supports and promotes individuals, like yourself, to act as the first trustee. This solution is NOT yet widely available in the region because many see trustees as being synonymous with Corporate Trustees. Nevertheless, our solutions can include another individual or even a Corporate Trustee as the substitute trustee if the trust is expected to outlast the first trustee.
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What exactly is a Corporate Trustee?
A Corporate Trustee is a registered company that is licensed by Suruhanjaya Syarikat Malaysia ("SSM") or Monetary Authority of Singapore ("MAS") to offer the public to act and be appointed as the trustee for the trust. They are referred to in the Trustee Act as a trust corporation.
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So how is it different from Individual Trustees?
Under the Trustee Act 1949 (for Malaysia) and Trustees Act (Chapter 337) (for Singapore), any qualified individual person can act and be appointed as trustee to a trust. Such a person is known as a sole trustee under the Act. And if more than one of them is appointed, they will act as joint trustees. An individual settlor can be appointed as such a trustee.
Appointing a Corporate Trustee
The Pros
01 Full Divestment of Trust Assets
Settlor can relinquish full control and ownership of trust assets to the Corporate Trustee to execute the trust.
03 Corporate Trustee Longevity
Corporate Trustee usually outlive the settlor and can continue administration of the trust even after settlor passes away.
Trust assets can be made creditor-proof (if trust is made irrevocable and settlor is not made the sole beneficiary).
04 Capability To Perform
Corporate Trustee is expected to properly carry out trustee's duties or risk being sued for breach of trust/negligence.
05 No Beneficiary Interaction
Settlor does not need to face and deal with the beneficiaries.
The Cons
01 Payable Stamp Duties
Ad valorem stamp duties are usually payable on transfer of trust assets to Corporate Trustee.
Click me to find out how much stamp duties are payable when transferring your assets to the Corporate Trustee.
03 Change Investment Advisors
High likelihood cannot continue with settlor's existing investment advisors/fund managers.
05 Change Trustee Difficult
If settlor is unhappy with Corporate Trustee services, cannot easily change the trustee when there is no breach of trust or negligence.
07 Trust Cancellation Fees
If trust is revoked, there may be cancellation of trust fees involved.
02 RPGT Charge
RPGT may be chargeable to settlor on disposal and transfer of trust assets to a Corporate Trustee.
04 KYC & AMLA Exposure
Trust setup and transactions will be subjected to Corporate Trustee's KYC and AMLA checking procedures.
06 No Settlor Interference
Settlor cannot interfere with trust administration or investment decisions so long as Corporate Trustee is acting within trust parameters.
08 Annual Trustee Fees
Recurring annual trust administration fees payable.
09 Legal Fees Required
Lawyer fees involved for attending to transfer of property title in land registry/land authority to Corporate Trustee and on trust revocation.
Click me to find out how much legal fees are payable when transferring your assets to the Corporate Trustee.
Appointing Settlor as Individual Trustee
The Pros
01 No Legal Ownership Transfer
The settlor (ie you) is not required to transfer legal ownership of trust assets on setting up the trust.
03 Quick Decision Making
Faster decision making - compared to Corporate Trustee required to follow its regulatory and operational procedures (including performing KYC and AMLA checks).
05 Trust Fund Savings
Substantial saving of trust funds as there is no recurring trustee administration fee involved.
07 No Stamp Duties
No ad valorem stamp duties are chargeable on trust setup or revocation of trust.
09 Not Regulated by BNM/MAS
Individual trustee is not subjected to BNM or MAS' direct supervision and regulations.
11 Settlor's Investment Advisor
Settlor can continue with or choose the investment advisor/fund managers of their own preference and is not limited to using the investment advisor/fund manager of the Corporate Trustee.
02 Settlor Retains Control
Settlor retains control and discretionary powers over the trust assets as the first trustee.
04 Easy To Substitute Trustee
Can appoint substitute individual trustee or Corporate Trustee when settlor wishes to retire as trustee before his/her death.
06 Settlor's Administration Advisor/Team
Can appoint professional advisors of settlor's choice to advise on matters pertaining to administration of the trust.
08 No RPGT Charge
No RPGT charge as no transfer of asset ownership is involved at the time of trust setup or at revocation of trust.
Creditor protection for trust assets (when the trust is made irrevocable and the settlor is not made the sole beneficiary).
12 No Lawyer Fees
No lawyer fees are incurred as no transfer transaction.
13 No Annual Trustee Fees
No recurring annual trust administration fees payable.
The Cons
01 Settlor's Responsibility
Settlor will need to perform and carry out the trustees' duties by themselves.
02 Higher Breach Risk
Higher risk of breach of trust occurring if settlor, not being an experienced trustee, acts without getting advice or consultation.
03 Direct Beneficiary Interaction
Settlor has to face and deal with the beneficiaries directly.