The global wealth of high net worth individuals is projected to nearly triple in size from 2006-2025 to surpass US$100 trillion by 2025, propelled by strong Asia-Pacific growth, according to the World Wealth Report by Capgemini.
In fact, if past growth rates hold, Asia-Pacific is likely to continue to be a dominant force over the next decade, representing two-fifths of the world’s HNWI wealth, more than that of Europe, Latin America, and the Middle East and Africa combined.
And as these HNWIs’ investable assets continue to grow, the strategies that they can use to protect and grow their wealth will only become increasingly complex. One legal structure that appears to have grown in favour with them is the trust.
A trust is a legal arrangement whereby the ownership of a property is divided between two parties, such that one person is entrusted with the legal title to the property (the trustee) whilst another person (the beneficiary) retains the beneficial (or equitable) ownership of the property. Real estate, cash, investment portfolio, business shares, jewellery, art collections or other items of value such as patents copyright, can be placed in trusts.
With so much at stake for HNWIs, here are some of the key reasons why setting up a trust works for them.