Quora Answer: Can I Hide Assets in a Foreign Trust for the Benefit of My Children?

The following is my answer to a Quora question: “Can I hide my assets in a foreign trust for the benefit of my children?”

You could do that, and you would not be the first.  From a Singapore-based consultant’s perspective, I have clients from neighbouring, developing countries, with convoluted and corrupt tax regimes, who choose to set up trusts in Singapore.  They do this to take advantage of our robust legal framework, our reputation for incorruptibility, and the lower tax regime.  Singapore imposes no estate tax and no capital gains tax.

Indonesia’s tax rate sits around 30 per cent across the board, a burden that includes CPF-equivalent contributions for Indonesians with Singapore Permanent Residency.  Tax has always functioned as a political tool as much as a fiscal one.  Indonesian Chinese are more likely to face enforcement scrutiny than other Indonesians holding comparable wealth, regardless of the stated legal criteria.

China has now joined this dynamic at a larger scale.  Announcement No. 21, issued by China’s Ministry of Finance on 24^th July 2026, imposes a 20 per cent tax on offshore trusts at establishment, at every year of operation, and at termination, reaching back retroactively to assets moved into trusts since 2023.  Families face a declaration deadline of 22^nd October 2026.  A trust structure that once shielded a family’s wealth from Chinese tax exposure now triggers the tax event it was built to avoid.

“Hiding” was Always the Wrong Word

Wealthy Indonesians have long bought large insurance policies, assigned them to an irrevocable trust, and layered ownership across several structures.  This remains perfectly legal.  Fund movements are easier to justify inside a major financial centre than inside a jurisdiction where tax enforcement doubles as political pressure.  Most wealthy individuals accept paying tax where they can see it working, funding roads, schools, and institutions that benefit them directly.  That confidence collapses in corrupt nations, where tax revenue frequently disappears into someone’s pocket rather than the public good.

You are not hiding assets in this arrangement.  You are assigning them to a distinct legal entity for tax mitigation and security, a distinction that matters more now than it did in 2019.

CRS 2.0 Changes the Compliance Conversation

The Common Reporting Standard’s second iteration took effect from 1^st January 2026 across more than 46 jurisdictions, widening reportable assets to include crypto and e-money, and demanding granular reporting on controlling persons and joint account structures.  Self-certification, the loose foundation earlier structures relied on, has tightened.  A trust structured in 2019 on the assumption that CRS reporting stayed static has already fallen behind a regime that now sees more of what it holds.  Declared figures under Announcement No. 21 must also match what foreign governments have already reported to Beijing under CRS.  Silence is not a viable strategy under either framework.

Jumbo Life Insurance Now Does the Job a Trust Used To

A directly held life insurance policy, a universal life plan structured properly, is not a trust or a trust-like arrangement.  Announcement No. 21 targets trusts specifically.  Premiums paid into a policy are cash contributions, not appreciated assets crystallising a taxable gain on entry.  Cash value growth accrues under insurance law, not trust law, and generates none of the annual reportable trust income Beijing’s rule was built to capture.

A jumbo universal life policy, held directly or layered with a Death Benefit Bequest Option for staged payouts to the next generation, delivers what a trust delivered in 2019: wealth protection, tax mitigation, and legacy security for families in volatile jurisdictions, without triggering the exact tax mechanism now built specifically to catch the older structure.  This remains especially necessary for wealthy individuals in politically unstable nations, where wealth faces seizure risk, and where the instrument protecting that legacy now needs to survive scrutiny under CRS 2.0 as well as domestic political pressure back home.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code