Changing laws mean constant monitoring of trust products

THE importance of constant monitoring of trusts by trustees has become more critical in recent years because of regular changing of jurisdictional tax laws and other regulations.

'Having first set up a trust to meet the various needs of a family or a corporation, we now find the increasing need to review it on a regular basis,' Paul Blackburn, head of Private Trust Services at HSBC Trustee, said. 'Regulations are becoming increasingly tight for off-shore trusts.' Mr Blackburn pointed to the recent new reporting requirements engineered by the Canadian Government and the new Finance Bill in Britain, both of which could affect trusts in Hong Kong and HSBC's other jurisdictions.

'What you set up 12 months ago may not be as valid or beneficial today because of changing global regulations,' he said.

'We stay in close contact with the family and we advise them when we think there is a change that could have a bearing on their trust.

'Then we might have to sit down once again with our advisers and review some of the legalities under which the trust was set up.' Sometimes the trustee bank will have to go back to square one and restructure the trust completely.

'It involves an ongoing administration of the trust and we are doing that more than ever before. In some cases, we will be looking at a fundamental change in a trust several times a year,' Mr Blackburn said.