Uncertainty about the outlook for Asian economies is causing wealthy families to clarify the boundaries between their personal and business assets, according to Lloyds Bank assistant director Andrew Niles. 'Families are beginning to realise the risks of not making a clear separation,' Mr Niles said. 'If there is a downturn in their business in the future, they do not want their personal wealth involved.' A properly set up trust structure could help make the required distinction between personal and business assets and provide for the future distribution of the family's wealth to its beneficiaries. 'Asian families feel a strong need to provide for future generations and, with a trust, the problems of probate and contentious issues relating to devolution of assets after death are avoided,' he said. If a wealthy individual dies with a diverse share portfolio registered in his or her name, it can take years to settle the estate because of complications from holding assets in various jurisdictions. Estate duties and inheritance taxes range from a maximum of 18 per cent on assets held in Hong Kong to 40 per cent in Britain and 55 per cent in the US. 'The relatives need to go through a rigorous process of proof while the assets of the deceased remain frozen. It can take anywhere from a minimum of nine months up to six years if there are any contentious issues between beneficiaries,' Mr Niles said. In these days of global investing, many individuals hold securities in foreign markets. If there is an international portfolio of assets held by a deceased person, relatives need to apply for probate not just in the country in which the individual died but in every jurisdiction in which assets are held. The time and expense involved and the loss of access to both capital and income during the time the assets are frozen can be avoided if the individual transfers assets into a trust while still alive. 'If you put the assets into trust, there is no need for probate on the grounds that the assets have been given away to the trustee to look after during your life time,' he said. High-net-worth Asian families were also looking increasingly to trusts as a way of providing continuity of management, Mr Niles said. 'As wealth grows, it becomes a far more complex business to manage it properly. By giving part of your wealth to trustees, they take over that responsibility.' Anyone putting their money into trust has to relinquish control of the assets in favour of the trustees, but they can indicate through a letter of wishes how they want the money invested and distributed. The person putting in the money and setting up the trust is known as the settlor in the ancient jargon of the business. To the bank or other institution providing the service, the settlor is their client while he or she is still alive, but their duty is towards the beneficiaries and this can lead to conflict: for example, if the settlor proposes using trust funds for a risky business venture. 'Once registration of the assets is changed over to the trustee, the settlor has no real power over the assets other than to make requests. Most reasonable requests are OK, but if someone asked for, say, 50 per cent of the assets to start up a gold mine a year after setting up the trust, the trustee would say it was too risky,' Mr Niles said. One way around such problems was for the settlor to request a distribution of assets and make the investment in their own name, outside the trust structure.