A testamentary trust lets you decide not only who receives your assets but also when and how they receive them. It is written into your will and only comes into effect after you pass away.
In this guide we explain how a testamentary trust works in Singapore, when it makes sense and how it compares with a living trust. We also cover the assets a trust cannot hold, which is the part many families overlook.
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What Is a Testamentary Trust?
A testamentary trust is set out in your will rather than in a separate trust deed. It takes effect only after your death once your will has gone through probate. Instead of passing assets straight to your loved ones, your will directs them to trustees who manage them under the rules you set.
While you are alive you can change or cancel the trust at any time by updating your will. It only becomes fixed after you pass away.
Role | Who It is | What They Do |
|---|---|---|
Testator | You | Writes the will and sets the trust terms |
Executor | The person named in your will | Applies for the Grant of Probate and gathers your assets |
Trustee | A person or licensed trust company you choose | Holds and manages the trust assets under your rules |
Beneficiary | The people you want to provide for | Receives money or support from the trust |
Your executor and trustee can be the same person. You can name one trusted relative for both roles and add a backup in case your first choice cannot act.
Why a Testamentary Trust Matters for Families
A will on its own decides who gets what. Once your assets are handed over your say ends there. For families with young children or dependants this can leave a real gap.
Without a trust, a child who inherits from you could receive everything in one go once they turn 21. Few young adults are ready to manage a large sum on their own. A testamentary trust closes that gap by letting you:
Keep a say after you are gone - Your rules decide when and how the money is released.
Provide steady support - Trustees can pay school fees, medical bills and living costs as they come up instead of handing over one lump sum.
Protect what you leave behind - People you trust manage the money so it is less likely to be spent too fast or lost to poor decisions.
Reduce family friction - Clear instructions leave less room for relatives to argue over what you would have wanted.
That peace of mind is what a trust offers that a simple will cannot.
How a Testamentary Trust Works in Singapore
A testamentary trust follows the same path as your will. Nothing happens until after your death and the court has confirmed your will is valid. From there the process usually runs in five stages:
You write the trust terms into your will. The will must meet the formalities of the Wills Act 1838. You must be at least 21 and sign in front of two witnesses who are present at the same time. A gift to a witness or their spouse is void so beneficiaries should never witness your will. Read more on the requirements of a valid will.
Your executor applies for probate. After your death the executor applies to court for a Grant of Probate. Here is how probate differs from letters of administration.
Assets move to the trustees. Once probate is granted the executor transfers the assets meant for the trust to your trustees.
Trustees manage and pay out. They follow your instructions on who gets what and when. The Trustees Act 1967 sets default duties such as a duty of care unless your will says otherwise.
The trust ends when your conditions are met. This could be when your youngest child turns 25 or when the funds run out. A trust in Singapore generally cannot run for more than 100 years.
When Does a Testamentary Trust Make Sense?
A simple will works well when your beneficiaries are adults who can manage money on their own. A testamentary trust is worth considering in these situations:
Your children are young. Leaving a lump sum to a child means someone still has to manage it for them. A trust lets you choose that person and decide when your child receives the money. For example a portion at 25 and the rest at 30.
A loved one has special needs. A trust can pay for care and living costs for life instead of handing over one large sum. The non-profit Special Needs Trust Company is another option. You open an account while you are alive with an initial S$5,000 and can then direct gifts from your will, CPF and insurance nominations into it.
You have a blended family. A trust can support your current spouse during their lifetime and then pass what remains to your children from an earlier marriage.
A beneficiary is not good with money. Staggered payouts or trustee discretion stop an inheritance from being spent all at once.
You want to ring-fence an inheritance. A well-drafted discretionary trust can keep assets separate from a beneficiary's personal finances. How much protection it gives depends on the wording so this needs careful drafting.
What a Testamentary Trust Cannot Hold
A testamentary trust can only hold assets that pass through your will. In Singapore several common assets do not:
CPF savings. These are not covered by a will. According to MoneySense they go to your CPF nominees. Without a nomination they are distributed under intestacy laws through the Public Trustee's Office.
Insurance with a nomination. The Life Insurance Association's nomination guide explains that a trust nomination belongs to your nominees and your will has no effect on it. A revocable nomination can be revoked by a later will. A policy with no nomination can be distributed under your will.
Jointly held property and bank accounts. Assets held as joint tenants pass to the surviving owner automatically and skip your will. This means a trust for your children could end up with far less than you expect. Review your nominations and how your property is held at the same time as your will. Our guide on 4 things not included in a will covers this in more detail.
Testamentary Trust vs Living Trust
Testamentary trust | Living trust | |
|---|---|---|
When it starts | After death once probate is granted | While you are alive once the trust deed is signed |
Goes through probate | Yes | Assets already in the trust do not |
Privacy | Terms sit in your will which forms part of the probate record | Terms stay in a private trust deed |
Can you change it | Yes by updating your will while alive | Depends on how the trust is set up |
Set-up cost | Lower as it is part of your will | Usually higher with ongoing trustee fees |
Best for | Parents with young children and straightfoward estates | Larger estates, business owners and those who want privacy |
For most families with young children a testamentary trust inside a well-drafted will is enough. A living trust is worth a look if you want the trust running during your lifetime or want certain assets kept out of probate.
Things to Weigh Before You Set One Up
A testamentary trust gives you more control over your inheritance but it also comes with trade-offs. It takes longer to start and may cost more to run than a simple will. Think through these points before you decide:
Probate comes first. The trust cannot start until probate is granted so there may be a wait before your beneficiaries receive support.
Your choice of trustee matters most. A family member costs less but must be willing and able to manage money for years. A licensed trust company brings experience but charges fees. Always name a backup.
You cannot explain yourself later. Unclear wording can lead to family disputes. The Law Society's Law Gazette highlights court cases where vague wills had to be interpreted by the court.
Tax still applies to trust income. IRAS removed estate duty for deaths on and after 15 February 2008. Income the trust earns such as rent or dividends may still be subject to income tax.
How to Set Up a Testamentary Trust in Singapore
List what will pass through your will. Leave out CPF savings, nominated insurance and jointly held assets.
Decide who the trust is for and what it should pay for. Education, medical bills and monthly living costs are common examples.
Set clear release rules. Choose ages or milestones or give your trustee discretion.
Choose your trustees. Pick someone you trust and name a backup.
Write a letter of wishes. It is not legally binding but it guides your trustees on how you would want decisions made.
Sign correctly and keep it updated. Marriage revokes an existing will in Singapore. Review your will after marriage, divorce or the birth of a child.
New to wills? Start with our guide to making a will in Singapore.
Set Up Your Testamentary Trust with Alps Wills
Alps Wills prepares testamentary trust wills for Singapore families. Our Certified Will Writers help you set clear conditions, choose the right trustee and check that your CPF nomination and insurance policies fit your plan.
Each testamentary trust will is quoted based on your family and assets. See our will writing services or book a free consultation to get started.