Hi Shane,
1) A trust instrument is an arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries.
2) In layman's terms is you are prepared to hand over this property to the beneficiaries, but due to the beneficiaries have not reached their legal age. Therefore you set up a trust to ensure this is passed down legally.
3) A lot of things are possible depends on how a trust is set up.
(a) Before beneficiaries reached their legal age, you may sell the property but the sales proceeds will remain in the trust. The interest and capital will be used on beneficiaries only, such as overseas education costs.
(b) After beneficiaries reached their legal age when they are legally able. Trust can be dissolved and treat the property according to their own will. This also depends on how the trust is drafted.
4) All real estate trust in Singapore will usually be drafted as an irrevocable trust. Meaning the trustee cannot reclaim the assets back in the trust.
5) You may read details on irrevocable trust here:
https://singaporelegaladvice.com/why-set-up-trust-singapore
6) On further detail on trust, it is recommended to seek advice from the professional over this. Below is a link explaining in detail "Buying a property on Trust for your child":
https://singaporelegaladvice.com/law-articles/buying-a-property-on-trust-for-your-child/
7) Selling the property under trust by the trustee is possible, and can be done anytime. But whether it meets your objective is another story.
8) As for your situation, you have to ensure the beneficiaries are eligible to keep the landed property. Note that only an SC can own a landed property.
9) There was such hearsay of full cash transaction upon selling is because a trust under 5 yrs is subject to claim from creditor should the settlor declared bankruptcy. The creditor has the right to claim all assets from the settlor within 5 yrs period.
10) Therefore no bank will release a loan to a buyer for a property hold in a trust within 5 years of setting up.
11) After the 2019 revision of the insolvency act, now the 5 yrs had changed to 3 yrs for 1st timer bankruptcy, Thus some banks are releasing loans to property hold in trust for 3 yrs.
12) But at the moment, most of the banks still kept the policy of only release loans to property hold in trust for a minimum of 5 yrs.
13) If you intent o set up a trust for a legal age person, I would suggest you speak to a lawyer to understand more.
Hope the above answer to your main concerns, but if there are more query, please feel free to contact me at
90110636
, or email: ling.ck7@gmail.com if more information is needed.
I'll be glad to assist.
Best regards
Ling CK
90110636
ling.ck7@gmail.com
https://R056727F.propnex.net/
https://www.facebook.com/Homesellerbuyer
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