What is a trust?
A trust is a legally binding arrangement under which assets of the settlor are transferred to a trustee, who will then administer the trust assets and distribute them to the designated beneficiaries according to the terms of the trust deed, as well as with reference to the intention of the settlor.
Professional trustees with expertise and experience in managing trusts are available in the market, but they invariably charge high fees.
In reality, it is not easy to find a trustworthy trustee who is willing to serve in this role gratuitously, and who is likely to survive both the settlor and the beneficiary. While there are professional trustees, not many people are able to afford the high fees charged by professionals to set up and manage an individual trust tailor made for just one’s own dependent with intellectual disability.
What is a Special Needs Trust?
To overcome the above-mentioned difficulties, some countries have developed the Special Needs Trust. In the Chief Executive’s policy address 2016, the government has announced that the Labour and Welfare Bureau will establish a working group to explore the feasibility of establishing a public trust, with a view to providing affordable services for people with intellectual disability.
The Special Needs Trust is an affordable trust specially designed for people with special needs (including people with intellectually disability). The Special Needs Trust pools together funds contributed by individual participating settlors for management and investment. This allows the sharing of fees and hence lower fees for individual participants. To reduce the fees, such trusts usually only cash but not flats or shares.
How does a caregiver join such a trust?
To participate in such trusts, the caregivers with the help of the trustee and its case manager devises a care plan, which sets out the expenditures needed for the dependent, write a letter of intent that appoints the caregiver to succeed them and explains how the trust fund should be disbursed for the benefit of the dependent and after the dependent passes away, and then transfer an amount of money (a small sum such as about HK$5,000) to set up the trust. They also execute a will to transfer a substantial amount from their estate into the trust on their death, e.g. they may instruct the executor to sell their flat and put the proceeds into the trust fund. Like in an MPF, the amounts designated for each beneficiary will be segregated, although the pooled funds will be invested, usually with a view to preserving the capital.
How does the trust operate?
When the caregivers pass away, the trust will be activated. The trustee will then make periodic distribution to the succeeding caregiver according to the letter of intent and care plan. The trustee’s case manager can make periodic (e.g. twice a year) visits to the dependent to check that the caregiver is looking after the dependent. Upon the dependent’s passing, the trustee will distribute the surplus to any person(s) indicated in the letter of intent. The main advantage of the Special Needs Trust is that financial assets devoted for the dependent are managed by a professional. The trust also allows dependents to participate in the decision-making process of the caregiver if this is set out in the letter of intent.
在參與此類信託時，家長會在受託人及個案經理協助下訂立一個照顧方案及寫下一份意向書。照顧方案列出受益人每月所需的支出，意向書則列出家長希望受託人如何根據照顧方案，運用資產，以及在受益人離世時由誰人獲得剩餘的資產。 訂立好這兩份文件後，家長會轉移一筆較少的款項（如港幣$5,000 ) 以成立信託帳戶，同時訂立遺囑讓財產在家長去世後轉移至信託之內。例如，家長可以指示遺囑執行人出售他生前的住宅，以套換現金至信託。像強積金一樣，每一位受益人的信託金額將會獨立分開記帳，而受託人會利用組合起來的資金投資，以防通脹 。
Last updated: March 2016
Disclaimer: The information available on this website is for preliminary reference only and should NOT be considered as legal advice. You should consult your own lawyer if you want to obtain further information or legal assistance concerning any specific legal matter.