A trust is a fiduciary relationship in which one party (named as the settlor) grants ownership of property or assets to another party (the trustee) for the benefit of a third party (the beneficiary). The trustee is obligated to professionally manage the settlor's property in accordance with the settlor's wishes.

Trust is widely recognized around the world. Overseas courts and prestigious financial institutions also recognize such a structure. In Hong Kong, a trustee is bound by the Hong Kong Trustee Ordinance Cap.29 and Recognition of Trusts Ordinance Cap. 76, as well as the Hague Convention of International Law.

Trust is a legal private arrangement outlined in a formal document called Deed of Trust which consists of the following parties to effect the creation of the trust:

The Settlor: The Settlor (or named ‘Asset Contributor”) is the person who creates the trust by transferring assets into the trust. Settlor’s right and power depend on the drafting of the Trust Deed. He can retain certain control of the trust such as investment management power. He can appoint a protector who has significant influence over the trust, such as the right to remove and appoint a trustee and the power to add or remove a beneficiary. The trustee will consider the wishes of the Settlor stipulated in the Letter of Wishes on how to manage the assets before and after the Settlor’s demise.

Trustee: The trustee holds the legal title of the trust assets for the interest of the Beneficiaries. There are different roles and duties of the trustee such as the administration of the assets, asset collection, and protection, investment oversight, and record keeping. Eventually, the trustee shall distribute the assets in accordance with the terms of the Trust Deed.

Beneficiaries: The Beneficiaries own beneficial ownership of the trust assets. They are entitled to the benefits of the capital and income of the trust fund. The Settlor can name the beneficiaries individually or for members of a described group of people, such as my unborn children or the grandchildren of my children.