A trust is defined as a legal relationship created when the client, or settlor, transfers assets, such as cash, property, insurance policies or business interests to a second party, a trustee, for the benefit of third parties, who may also include the client.

Ms Fu said trusts were not only for the rich - people with assets of 'a few million Hong Kong dollars' could also benefit from them. A simple trust can be created for as little as $5,000, with annual maintenance costs of about the same amount.

'Someone might set up a trust fund for their children and put their life insurance policy in it in order to ensure that the proceeds go to their children, since in some places nomination [of a beneficiary] could be contested,' she said.

More complicated trusts involving a web of family members, business investments and nationalities could cost $100,000 or more to set up and between $100,000 and $200,000 annually to maintain. Ms Fu said the most popular type of trust offered by Royal Skandia was a discretionary one. Unlike a fixed trust in which payments or allocations are rigidly set, a discretionary trust gives a trustee flexibility in making disbursements as he or she sees fit.

'Trustees have a wide range of powers under a discretionary trust. They can do quite a lot of things for the settlor,' she said, adding that they could even collect rents from investment properties on behalf of the client.

Almost any type of asset can be placed into a trust, such as cash, stocks, bonds and property. 'Anything really that you don't need to live on. Short-term cash or stocks that are traded daily shouldn't go in, unless you already have a fund adviser with a full discretionary mandate,' she said.

Because ownership of assets is relinquished, trusts offer certain advantages that wills do not.

Wills are probated and become public after death, while trusts remain confidential and are not subject to probate. It may take months or years to gain access to assets under a will, while assets are available immediately with a trust.

Trusts also offer protection from creditors and mitigation of taxes, such as estate duty.

In Hong Kong, an estate duty is levied on the net principal value of property in the territory at the time of a person's death.

Charges are imposed on estates valued at $7.5million and above, with rates ranging from 5 to 15 per cent as the value of the estate increases.

In recent years, a number of jurisdictions around the world have abolished their estate duty regimes.

The Hong Kong government introduced a bill in May to do the same. The bill was expected to sail through the legislature, but lawmakers demanded more time to examine its provisions and the vote has been put off until later this year.

If the estate duty was abolished in Hong Kong, Ms Fu said it would have only 'a small impact' on her company's trust business.

'The primary reason people set up trusts is because they want their assets distributed in a certain way or because they want to avoid probate - not because of estate duty,' she said.

But she said those who waited to see how the estate duty issue played out before deciding on whether or not to establish a trust could be putting their assets at risk if they passed away in the interim.

One unanticipated benefit of the estate duty bill is that it may also help people recognise the need to take a long-term view of their lives.