Tailor-made Special Purpose Trust for Succession of Family Wealth and Business

We advised a high-net-worth client on a succession plan arrangement of a core family business by way of establishing a special purpose trust for transferring the majority interest of the family business to its second-generation successor and for the maintenance of other family members via another family trust.

The subject family business is in a leading role in its industry in Hong Kong and globally. This innovative arrangement was meticulously designed by our team for the client to facilitate a smooth and harmonious transition of interest in the core family business and provide a stable and healthy base for further development of the business under the control and leadership of the successor. In this particular scheme and transition, the successor shall commit to shouldering part of the responsibilities on the maintenance and support of other family members in the future, involving a substantial and long-term undertaking exceeding hundreds of million Hong Kong dollars. The arrangement required a thorough analysis of the trust proposal and financial obligations to ensure compliance with legal requirements and enforceability of the agreed terms. In cooperation and coordination with the financial adviser of the client and the team of the professional trustee, we played a pivotal role in this trust scheme to deliver a sustainable and long-term solution to client’s succession plan. To complete this wealth succession project, we advised the client and made a bespoke will covering other particular assets and residuary estate for other family members and next generation. In recent years, the general public become aware of the benefit of Enduring Power of Attorney which allows the appointed attorney to act on and make decisions on behalf of the donor when the latter becomes mentally incapable. In order to take care of any situation that client might be unable to deal with his financial affairs due to his lack of mental capacity, we advised and created an Enduring Power of Attorney for the client as a precautionary measure.

This project underscores the rising demand from high-net-worth individuals and their families for sophisticated family trust structures capable of accommodating complex financial arrangements on business and wealth succession while preserving family harmony. We combine our expertise in trust law, family governance, and succession planning to provide practical, bespoke, and solution-oriented advice. We are delighted to have assisted in the creation of a framework that not only secures the succession of client’s wealth but also embodies their values of responsibility, unity, and care for next generation.

This case was led by our Partner Mr. Roy Leung, assisted by our Senior Associate Mr. Trevor Lee, and Paralegal Mr. Andes Leung.