You’ve decided to set up a trust. Great.
Now comes one of the most important—and misunderstood—questions in estate planning:

Who should be your trustee?

For many people, the instinct is to appoint a spouse, sibling, or child. It feels personal. It feels loyal.
But in reality, choosing a corporate trustee—a licensed, regulated trust company—might be safer, smarter, and more secure.

Let’s explore why.

⚖️ What Is a Corporate Trustee?

A corporate trustee is a professional entity licensed to manage trusts. In Malaysia, they are governed by specific legislation that ensures they operate with transparency, professionalism, and accountability.

📚 How Corporate Trustees Are Regulated in Malaysia

Corporate trustees operating onshore in Malaysia are governed by the Trust Companies Act 1949:

• Under Section 3, a public company must fulfill key requirements—such as adequate paid-up capital, sound governance, and financial stability—to qualify as a trust company.

• Once these requirements are satisfied, a certificate is issued under Section 4, officially registering the public company as a trust company.

• Section 6 mandates the Registrar of Companies to maintain and regularly update a public list of all registered trust companies in Malaysia. This ensures transparency and public trust.

🌐 Onshore vs. Labuan Trust Companies

Malaysia also offers trust structures through Labuan, a well-known offshore financial center:

• Labuan trust companies are licensed under the Labuan Financial Services and Securities Act 2010, and are regulated by the Labuan Trusts Act 1996.

• Under Section 4 of the Labuan Trusts Act 1996, a trust company must be licensed by the Labuan Financial Services Authority (LFSA) to legally operate.

Key Differences:

• Onshore trust companies cater to Malaysian residents, operate under civil law, and are subject to domestic taxation and compliance.

• Labuan trust companies are often used in cross-border estate planning, offering greater flexibility for international clients and high-net-worth individuals.

Both structures are legitimate—but serve different purposes depending on your estate and planning goals.

⚠️ The Problem with Individual Trustees

While family members may have good intentions, they often lack:

• Objectivity – Personal bias, emotional ties, or sibling rivalry may affect decisions.

• Expertise – Few individuals are trained in trust law, taxation, and fiduciary duties.

• Capacity – Managing a trust is a long-term administrative responsibility.

They may delay distributions, cause disputes, or become incapacitated—requiring costly legal interventions.

✅ Advantages of a Corporate Trustee

🧠 Real-Life Scenario

Mr. Goh had a complex estate: several rental properties, business interests, and four children from two marriages.
Rather than risk future conflicts, he appointed a corporate trustee to manage the trust.

He included a Letter of Wishes to express his priorities, values, and legacy goals.

The result?
His trust was executed smoothly, fairly, and without drama—giving his family peace and certainty.

💬 Final Thought

Appointing a corporate trustee isn’t a sign of mistrust in your loved ones.
It’s a sign that you value professionalism, structure, and future-proofing.

If your estate is substantial or your family situation complex, a corporate trustee may be the best decision to protect your legacy—and the people you love.

Coming up next:
“The Top 5 Myths About Trusts—Debunked”
Think trusts are only for the rich? Or that they take away control? You’ll want to read this.