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Legacy Planning: When Should You Consider A Trust

By Medinex Team

June 30, 2026

By Medinex Team

Table of Contents

According to the HSBC Life 2026 Legacy Planning Survey, approximately 45% of Singapore’s High-Net-Worth Individuals (HNWIs) now have formal legacy plans in place, outpacing their regional peers. However, a significant gap remains with 50% of these individuals citing the potential mismanagement of wealth by the next generation as their primary concern. With more complex considerations today, the conversation for legacy planning is shifting from a simple distribution – normally via Wills in the past – to a more sophisticated form such as a Trust.

1. Understanding The Differences Between A Will & A Trust

While both Wills and Trusts are designed to help you pass on your legacy, they function with varying levels of speed, privacy, and control. Let’s start by understanding what they are.

Wills

A Will is a legal document that outlines your instructions for how your assets—such as property, money, and personal belongings—should be distributed after your death. It also allows you to appoint an executor to manage your estate and name guardians if you have any minor children.

Trusts

A Trust is a legal arrangement where one party (the trustee) holds and manages assets on behalf of another party (the beneficiary). It is created by a “settlor” (or grantor) to ensure their property, cash, or investments are handled exactly according to their wishes.

2. Key Differences Between Will & Trust

Feature	Will	Trust Fund (Living/Inter-vivos)
Activation	Only upon death.	Can be active immediately (during your lifetime).
Publicity	Becomes a public record through the probate process	Remains private; there is no public trust register in Singapore.
Probate	Requires court validation (can take 6 months to years).	Bypasses probate; assets transfer or remain managed instantly.
Continuity	Offers a "one-time" distribution of assets.	Allows for "staged" distributions over decades or generations.
Incapacity	Does not manage assets if you are alive but mentally incapacitated.	Can provide seamless asset management if the settlor loses capacity.

3. Why Should You Consider A Trust

As of 2026, Singapore’s Trustees Act 1967 and its recent refinements have made the city-state a global hub for wealth protection. Here are some of the benefits you should be aware of.

A. Robust Asset Protection

A Trust separates legal ownership (the Trustee) from beneficial interest (the Beneficiary). This shields the assets from creditors, lawsuits, or bankruptcy and is particularly vital for business owners. IQ-EQ Singapore notes that trusts prevent “sideways disinheritance,” ensuring assets stay within the bloodline even in cases of remarriage or divorce within the family.

B. Preventing "Affluenza"

Affluenza is a portmanteau of “affluence” and “influenza”, and it describes the negative psychological, social, and behavioural effects of wealth and extreme materialism. A lump-sum inheritance may stifle a child’s drive, but with Trust, it allows for Conditional Distribution. You can specify the conditions for the funds to be released, such as higher education, entrepreneurial ventures, or milestones (reaching age 30, marriage, or buying a first home).

C. Tax Efficiency and Incentives

In the 2026 tax climate, Singapore resident trusts face a 17% headline tax rate on income. However, many HNWIs utilise Section 13O or 13U tax incentive schemes for Family Offices, which, when paired with a trust, can result in tax-exempt treatment for qualifying investment income. Speak to us if you need further clarification on this.

4. Key Considerations For Setting Up A Trust

Professional vs. Private Trustees: While appointing a family member is cheaper, professional trustees offer neutrality. HSBC Life reports that 37% of Singaporean HNWIs fear family conflict; a professional trustee acts as a “buffer” to prevent disputes.

Jurisdictional Risk: If you have assets in the US or UK, setting up a Singapore trust may trigger “exit taxes” or “grantor trust” rules. Always seek integrated advice if your family has mixed residency.

Setup & Maintenance of Trust can be costly. A standalone discretionary trust with a licensed trust company can cost between $15,000 to $35,000 to set up. There will also be an annual fee for administration ranging from $15,000 to $60,000 annually, depending on asset complexity.

If you need further consultation on how to set up a Trust fund, send us an email at contact@medinex.com.sg. MEDINEX Limited is an established one-stop consultancy service with more than 20 years of experience helping companies and High-Net-Worth Individuals. We understand the challenges and have the necessary expertise to provide the right solutions to overcome them.

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References & Sources
• HSBC Life “Bridging the Intentions-Action Gap” Legacy Survey (March 2026).
• Capgemini World Wealth Report (June 2026).
• Singapore Trustees Act 1967 (Updated 2026).
• IQ-EQ Singapore Succession Insights (October 2025).
• The Straits Times: Family Estate Dispute Analysis (June 2026).