Amended Trust Law comes into effect Dec.1

Should bring about increase in estate planning activity.

The Trust Law (Amendment) Ordinance 2013 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 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 established with beneficiaries hundreds of years into the future. The removal of the duration limit puts Hong Kong ahead of Singapore, which has a cap of 125 years.

Other significant aspects of the amendment bill include 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 settlers and anti-forced heirship provisions

The Trust Law (Amendment) Ordinance 2013 was gazetted July 26 following the passage of the relevant bill by the Legislative Council on July 17.

The Amendment Ordinance will bolster the competitiveness of Hong Kong's trust services industry and attract settlors to set up trusts in Hong Kong.