Singapore is a premier jurisdiction for establishing and operating different types of trusts. This doesn't come as a shock since the city is home to many of the leading global financial institutions and accountancy, legal, and tax advisory firms.

Singapore's market-friendly and stable economic policies also encourage international investors to consider it a favored destination for various investment vehicles. If you're considering setting up a trust in Singapore, there could be no better time than now.

Yet, before proceeding, it is worth understanding what this entails. A trust is a legal arrangement in which property ownership is divided between two parties. One person is entrusted with the legal title to the property, while another retains the beneficial ownership of the property.

Creating a private trust in Singapore is easy since it may be done by will, deed, or declaration. Even so, it generally requires certainty about its intention. Trusts created should comply with the formalities of the Wills Acts and take effect after the settlor's death.

Trusts created by declaration will generally differ since they should comply with the relevant Civil Law Act, depending on the kind of property placed in the trust. To create a trust in Singapore, the settlor should execute a written document along with the legal transfer of the property to the trustee.

In Singapore, settlors can freely choose to settle most types of property into the trust as long as the property is in existence, ascertainable, and capable of being possessed by an individual. After the property is transferred from the settlor to the trustee, the trustee manages it for the beneficiaries' well-being according to the terms determined in the trust instrument.

Remember, a trust can be fixed or discretionary. In the event of a discretionary trust, the realtor usually creates a Letter of Wishes at the time of setup, which offers guidance to the trustee for exercising the discretionary power.

A discretionary trust is usually offered because the settlor's circumstances and other peripheral factors may change over time. A discretionary trust would allow the trustee to accommodate any future solicitation by the settlor.