Setting up a Family Trust

[Scuba Joe]

Hello

I did a search for Family Trusts and came up with nothing. I hope I'm not repeating an existing thread. Many here have set up a company with themselves owning 40% and other Filipinos owning 60%. I'm looking into the possibility of setting up a Family Trust which may be a better option than a company. The little lady will be expecting a child soon. My idea was to include the child in the family trust (and any future children). The Family Trust would consist of myself, minor child and the missus. I'd then use the Family trust for the purposes of purchasing property (land), investments and some business activities. A Family trust requires a trustee. The trustee basically is in control. Can a foreigner be a trustee? Does anyone have any experience with establishing a Family Trust in the Philippines? Any feedback, comments or experiences would be greatly appreciated also recommendations for lawyers/ accountants etc who can establish a Family Trust.

[Snowy79]

2 hours ago, Scuba Joe said:

Hello

I did a search for Family Trusts and came up with nothing. I hope I'm not repeating an existing thread. Many here have set up a company with themselves owning 40% and other Filipinos owning 60%. I'm looking into the possibility of setting up a Family Trust which may be a better option than a company. The little lady will be expecting a child soon. My idea was to include the child in the family trust (and any future children). The Family Trust would consist of myself, minor child and the missus. I'd then use the Family trust for the purposes of purchasing property (land), investments and some business activities. A Family trust requires a trustee. The trustee basically is in control. Can a foreigner be a trustee? Does anyone have any experience with establishing a Family Trust in the Philippines? Any feedback, comments or experiences would be greatly appreciated also recommendations for lawyers/ accountants etc who can establish a Family Trust.

Definitely one for the legal experts and maybe even two just to cross check the information.  There are anti dummy laws here which in short does not allow a foreigner to control land, the ultimate control must always be by a Philippines citizen.

[Dave Hounddriver]

5 hours ago, Scuba Joe said:

The little lady will be expecting a child soon. My idea was to include the child in the family trust (and any future children). The Family Trust would consist of myself, minor child and the missus.

The problem you will find is that the Filipina mother has total authority over the child and can decide for and sign for that child until the age of 7.  So a family trust would mean trusting the missus.  But the idea does have merit once the kids are over 7.

[JJReyes]

It is possible to set up a trust.  There are a few complications.  In the Philippines, the law requires equal distribution.  If you have three children, they are all entitled.  If you have another child born out of wedlock, he/she is entitled to one half share.  You can't, for example, eliminate one child because that child is someone you don't like.  You need to consult a lawyer.

[Joey G]

On 7/13/2022 at 8:58 PM, Scuba Joe said:

I did a search for Family Trusts and came up with nothing.

Actually the term "Family Trust" is not a specific kind of trust... it's just a term used when any "trust" benefits only "Family Members".  Typically a "Family Trust" is either a "Revocable Trust" or a "Irrevocable Trust", that is set up specifically for family members. There are other types of trusts, but those two are the most common.

 

 

 

 

 

[Mike J]

On 7/14/2022 at 8:58 AM, Scuba Joe said:

The Family Trust would consist of myself, minor child and the missus. I'd then use the Family trust for the purposes of purchasing property (land), investments and some business activities

I will paraphrase Philippine law here.  The supreme court has ruled that any method or means used to create a way for foreigners to own or control land is a violation of the law in and of itself.  You may find a lawyer will you do what you want, but that does not mean it will be legal.

[Scuba Joe]

Thank you everyone's feedback. I'm well aware of the Supreme courts ruling that "any method or means used to create a way for foreigners to own or control land is a violation of the law in and of itself". What is the law and getting the law enforced are 2 separate matters. Getting the law enforced can be an expensive process. Sometimes despite operating in a grey area or on the periphery of the law, its possible to still operate by making enforcement a complicated and expensive process. Dave Hound driver commented that the Mother has total "authority" over a child until 7. If Dave could elaborate on that, I'd appreciate it. What is the relevant legislation? Again, Thanks to everyone 

[Kingpin]

On 7/16/2022 at 8:25 PM, JJReyes said:

It is possible to set up a trust.  There are a few complications.  In the Philippines, the law requires equal distribution.  If you have three children, they are all entitled.  If you have another child born out of wedlock, he/she is entitled to one half share. 

What about life insurance, does that require equal distribution, or can you decide who the beneficiaries are?

 

[Old55]

2 minutes ago, Kingpin said:

What about life insurance, does that require equal distribution, or can you decide who the beneficiaries are?

 

A life insurance policy would clearly call out beneficiaries and distribution per the buyers instructions. Philippines laws don't come into play for international policies. 

[Kingpin]

1 hour ago, Old55 said:

Philippines laws don't come into play for international policies. 

Right, but do international policies include foreign children? I was actually referring to Philippines life insurance, seems a more popular option than trusts.