Impact of the Trustee (Amendment) Act 2025 on the Trustee

A question that is often posed in the legacy planning process is, if I have to set up a trust for myself, should I set it up as a Living Trust or a Testamentary Trust? The answer to this can either be straightforward or a nuanced one, depending on the circumstances of the would-be Settlor. Complications tend to arise when they are more than a single objective to be met. In multiple objective scenarios, which can be quite common in complex and dynamic families, the challenge is to ensure these objectives are blended as much as possible to avoid and minimise conflict.

For this short article, we will examine the impact of the 2025 amendments made to the Trustee Act. Under Section 44 of the amending Act, all express trusts are required to comply with regulatory compliance duties and obligations. These include the requirement for the Trustee to collect specific information and keep records of it in a particular manner. Such information is required by regulatory authorities and financial institutions to support them in performing AMLA screening activities. Needless to say, the workload of a Trustee is now a lot more onerous if he/she is to avoid the penalties imposed for any failure to do so.

So, is there a way to avoid the abovementioned requirements of Section 44? The short answer is yes. Under the Trustee (Exemption) Order 2025, Trustees of an express trust that shall receive any trust property from under a will, a probate or letters of administration are fully exempted from having to comply with the requirements of Section 44. This means that if a would-be Settlor does not wish to impose additional duties and obligations on his/her Trustee, then setting up his/her trust as a testamentary trust is the way ot go. Is the protection and security provided by a testamentary trust inferior to that of a living trust (i.e., trusts that are set up outside the estate of the Settlor)? Again, the short answer here is no.

If you wish to avoid making public sensitive information on your assets, writing a will to specifically include your testamentary trust is highly recommended, especially if setting up a living trust has become necessary in your personal circumstances. As setting up and structuring the required testamentary trust can be complex, we at Generations-ASIA are at hand to provide you with our professional services to write your Will to ensure such a testamentary trust is properly structured and, most importantly, legal and binding on the Trustee and all your named beneficiaries.