From Waqf, Ancestor Worship to the Rise of the Global Trust: A History of the Use of the Trust as a Vehicle for Wealth Transfer in Singapore

Author:Tang Hang Wu
Position:Professor and Director of Centre for Cross-Border Commercial Law in Asia, School of Law, Singapore Management University
Pages:2263-2292
SUMMARY

This Article explores the historical use of the trust in Singapore from the early colonial days to modern times as a means of wealth transfer. English trust law which travelled to Singapore by reason of its colonial past had to be adapted and negotiated by the colonial judges in light of cultural and religious norms worlds away from that found in England. This essay traces three major uses of the trust as a means of wealth transfer in Singapore's history. First, the trust was used by rich Chinese families for... (see full summary)

 
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2263
From Waqf, Ancestor Worship to the Rise
of the Global Trust: A History of the Use
of the Trust as a Vehicle for Wealth
Transfer in Singapore
Tang Hang Wu*
ABSTRACT: This Article explores the hi storical use of the trust in Singapore
from the early colonial days to modern times as a means of wea lth transfer.
English trust law which travelled to Singapore by reason of its colonial past
had to be adapted and negotiated by the colonial judges in light of cultural
and religious norms worlds away from that found in England. This essay
traces three major uses of the trust as a means of wealth tra nsfer in Singapore’s
history. First, the trust was used by ric h Chinese families for succession
purposes which included the pro motion of ancestor worship and b urial
grounds. However, the custom of perpetual a ncestor worship ultimately
proved to be incompatible with the Engl ish law against perpetuities. This
irreconcilability, coupled with the fa ct that the practice of ancestor worship is
becoming less common, has meant that such trusts are virtually unheard of
these days. Second, the trust was us ed by wealthy Arab merchants who
controlled much of the business and land holdings in Singapore to fur ther
succession planning and religious pu rposes. The popularity of the use of the
trust by these Arab traders may be d ue to the fact that the trust was not an
alien concept to them because Muslim law utiliz es the concept of the waqf,
which is similar to the trust. However , Islamic concepts inherent in the wa qf
proved to be too discordant with English trust law doc trines for the sustained
use of the trust in this context. Th is incompatibility together with c oncerns of
proper governance of the waqf led to statutory reforms. Such reforms resulted
* Professor and Director of Centre for Cross-Border Commercial Law in Asia, S chool of
Law, Singapore Management University. Earlier versions of this paper were presented at various
conferences in Harvard, Leeds, Singapore, and Iowa. I am grateful to Thomas Gallanis, Masayuki
Tamuraya, Richard Nolan, Kelvin Low, Yip Man, Zinian Zhang, Gerard McCormack, Jingchen
Zhao, Ahmad Nizam, Raymond Gwee, George Zhou, Nick Piska, Lim Ping Ping and Robert
Sitkoff for their helpful comments on earlier drafts. Thanks are also due to Elizabeth Naumczyk
and Chai Yee Xin from the Singapore Management University Law Library and Carolyn Wee
from NUS Law Library for their help in procuring some of the historical sources used in this
article. The usual disclaimers apply.
2264 IOWA LAW REVIEW [Vol. 103:2263
in the waqf being compulsorily managed b y the Islamic Council of Singapore.
Finally, the modern contempora ry use of the trust coincided with the arriva l
of what I term as a form of global trust to Singapore. Rooted in doctrinal
developments in English law, inspired by developments in offshore financia l
centers, and created by ingenious draftpersons, th e quintessential global trust
is a form of a highly discretionary trust. Such discretionary trusts are used by
the financial industry in Singapore and elsewh ere as one of the principal
means of modern wealth management. This final wave reflects the emergence
of Singapore as a major wealth manag ement center in Asia. This Article
traces this development and hig hlights the challenges on the horizon
especially in the context of international pressures for transparency.
Ultimately, this case study on the historical a nd contemporary use of the trust
in Singapore demonstrates the flexibili ty of the trust concept in facilitating
wealth transfer through the ages.
I. INTRODUCTION ......................................................................... 2264
II. ENGLISH TRUST LAW ARRIVES IN SINGAPORE ............................ 2267
III. EARLY USES OF TRUST LAW IN COLONIAL SINGAPORE ............... 2269
A. THE USE OF THE TRUST FOR THE PERFORMANCE OF
SINCHEW RITES (CHINESE ANCESTRAL WORSHIP) .................. 2269
B. USE OF THE TRUST BY THE CHINESE FOR BURIAL
GROUNDS ............................................................................ 2275
C. ARABS USING TRUST LAW TO ESTABLISH WAQF ..................... 2277
IV. EARLY USES OF THE TRUST BECOMING SUPERSEDED IN
MODERN TIMES ......................................................................... 2281
V. THE GLOBAL TRUST ARRIVES IN SINGAPORE ............................. 2283
VI. CONCLUSION ............................................................................ 2291
I. INTRODUCTION
Due to its colonial past, the laws of Singapore are essentially derived from
English law.1 In the early days, the legal application of English law to a
multicultural society like Singapore, with very different customs, norms and
social context, created embarrassing problems. For instance, as Andrew
Harding points out, 2 early colonial judges had to decide awkward questions
1. See ANDREW PHANG BOON LEONG, THE DEVELOPMENT OF SINGAPORE LAW 3451 (1990).
2. Andrew Harding, Global Doctrine and Local Knowledge: Law in South East Asia, 51 INTL
& COMP. L.Q. 35, 35 (2002).

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