Nerine Group of Fiduciaries, with offices in the BVI, Geneva, Guernsey, Hong Kong and India, has welcomed the changes to the 1934 Hong Kong Trust Law and believes it will herald an increase in estate planning activity in the region.
The Trust Law (Amendment) Bill 2013 , which will come into force on 1 December this year, implements a number of significant amendments including the creation of a statutory duty of care, similar to that in the UK, and establishing a beneficiary’s rights to remove trustees without resorting to the courts.
The amendment bill also abolishes the rules against perpetuities and against excessive accumulations. The result is that new non-charitable trusts – such as private trusts for wealth and estate planning – are no longer limited in duration. Perpetual trusts may now be set up with beneficiaries hundreds of years into the future. The removal of the duration limit puts Hong Kong ahead of its major rival, Singapore, which has imposed a cap of 125 years.
Other significant aspects of the amendment bill are:
• New statutory trustees’ powers to insure and to appoint agents nominees and custodians, along with corresponding new duties and liabilities for trustees
• statutory control of trustees exemption clauses
• statutory provisions concerning the validity of reserving investment powers to settlors
• anti-forced heirship provisions
Nerine Hong Kong senior trust manager, Katja Meyer-Paysan, said the changes, although conservative in nature, would allow the industry to market new business opportunities in retail funds and private trusts arising from growing wealth.
“The new law brings Hong Kong trust structuring into the 21st century and provides a viable alternative to other international finance centres. This is progress and makes Hong Kong a more realistic and attractive choice for clients.”