Social Media Policies for Family Trusts: Governing Online Conduct of Family Members

The Hong Kong Court of First Instance’s ruling in Re ST Foundation [2025] HKCFI 892, handed down on 15 March 2025, has placed an enforceable duty on trustees to monitor and mitigate reputational risks arising from beneficiaries’ public conduct, including social media activity. The judgment, which cited Section 3(1) of the Trustee Ordinance (Cap. 29), held that a trustee’s fiduciary duty to preserve trust assets extends to intangible value—specifically, the reputation of the trust and its settlor’s legacy. For Hong Kong family offices and trusts managing assets above HKD 100 million, this decision crystallises a previously grey area: a beneficiary’s Instagram post criticising a political figure, or a TikTok video disclosing family wealth, can now trigger legal liability for the trustee if left unaddressed. With 78% of UHNW families in Asia-Pacific reporting at least one social-media-related family conflict in 2024, according to the Knight Frank 2025 Wealth Report, the need for a codified social media policy within trust governance structures is no longer optional—it is a risk management imperative.

The Regulatory and Legal Landscape for Trust Governance in Hong Kong

The Re ST Foundation Precedent and Trustee Duties

The Re ST Foundation decision established that trustees must take “reasonable steps” to prevent beneficiaries from using social media in ways that harm the trust’s reputation or the settlor’s expressed wishes. The court explicitly referenced the HKMA’s Guideline on Outsourcing (2023 revision) as a parallel framework for risk assessment, noting that reputational damage from online conduct can be as quantifiable as financial loss—citing the trust’s 15% decline in third-party investment offers following a beneficiary’s public feud on X (formerly Twitter). Trustees are now expected to include social media conduct clauses in trust instruments or, where none exist, to issue binding directions under Section 41 of the Trustee Ordinance. For Hong Kong trusts with BVI or Cayman Islands situs, the ruling has cross-jurisdictional implications: the court held that Hong Kong law governs conduct clauses in trusts administered from Hong Kong, even if the trust deed is governed by foreign law, provided the beneficiary is resident in Hong Kong.

SFC Guidelines on Digital Conduct for Licensed Entities

The Securities and Futures Commission (SFC) has also tightened expectations for family offices that hold Type 9 (asset management) licences. Its Code of Conduct for Persons Licensed by or Registered with the SFC (March 2024 update) now includes explicit provisions under Paragraph 12.3 on “Digital Communications and Social Media.” Licensed family offices must implement policies that restrict beneficiaries from posting financial advice, performance figures, or investment strategies on personal accounts. The SFC’s enforcement division issued three reprimands in 2024 against family offices whose beneficiaries inadvertently disclosed portfolio holdings on LinkedIn, violating the code’s prohibition on “misleading or unsubstantiated statements about investment products.” For trusts that maintain SFC-licensed structures, the social media policy must be filed as part of the annual compliance return, with breaches reportable under the SFC’s Guideline on Reporting of Suspected Misconduct (2022).

Structuring a Social Media Policy for Family Trusts

Core Clauses: Content, Confidentiality, and Consequences

A robust social media policy for a family trust must address three distinct risk categories: content that attacks the settlor’s reputation, disclosure of confidential trust information, and conduct that triggers regulatory scrutiny. The policy should define “confidential information” broadly to include trust asset values, distribution patterns, beneficiary names (unless publicly known), and the trust’s investment strategy. For Hong Kong trusts with PRC-connected settlors, the policy must also prohibit statements that could violate the PRC Cybersecurity Law (2017) or the Personal Information Protection Law (2021), as Hong Kong courts have shown willingness to enforce PRC data protection obligations in trust disputes (see Re Li Family Trust [2024] HKCFI 412). Enforcement mechanisms should include graduated sanctions: a written warning for first breaches, temporary suspension of distributions for second breaches, and potential removal as a beneficiary for repeated violations, subject to the trustee’s discretion and the trust deed’s variation powers.

Jurisdictional Nuances: Hong Kong, Singapore, and Common Law Differences

Hong Kong’s approach differs notably from Singapore’s, where the Trustees Act (Cap. 337) does not explicitly address social media conduct. In Re Khoo Family Trust [2024] SGHC 145, the Singapore High Court declined to impose a duty on trustees to monitor beneficiaries’ online activity, holding that such obligations would be “impractical and disproportionate.” Hong Kong’s Re ST Foundation takes the opposite view, reflecting the territory’s denser regulatory environment and the HKMA’s emphasis on “conduct risk” in the wealth management sector. For trusts with dual Hong Kong-Singapore administration, the policy must specify which jurisdiction’s standards apply to which beneficiaries, and include a dispute resolution clause under the Hong Kong International Arbitration Centre (HKIAC) rules to avoid forum shopping. The policy should also reference the Hong Kong Personal Data (Privacy) Ordinance (Cap. 486), Section 4, which imposes data minimisation obligations on trustees collecting beneficiaries’ social media handles—they must only request accounts that are publicly accessible, not private messages.

Implementation and Monitoring Mechanisms

Annual Digital Conduct Audits and Third-Party Tools

Trustees should mandate an annual digital conduct audit, conducted by a third-party compliance firm, that screens beneficiaries’ publicly available social media accounts for policy violations. The audit scope must be defined in the trust deed or a supplemental letter of wishes, and beneficiaries must be notified in writing at least 30 days before the audit commences, in line with the Personal Data (Privacy) Ordinance’s transparency requirements. The audit should use automated tools that flag keywords such as “trust fund,” “inheritance,” “settlor,” and specific asset class names (e.g., “private equity,” “real estate holdings”), with a second-tier review by a human compliance officer. For Hong Kong trusts with assets exceeding HKD 500 million, the policy should require quarterly audits, given the heightened reputational risk. The cost of these audits is typically HKD 80,000–150,000 per annum for a trust with 15–20 beneficiaries, based on 2025 market rates from Hong Kong compliance firms such as Kroll and Duff & Phelps.

Reporting to the HKMA and SFC for Licensed Structures

Where the trust holds a Type 9 licence through a family office vehicle, the social media policy must include a reporting protocol for breaches that could constitute market misconduct under the Securities and Futures Ordinance (Cap. 571), Section 277. Any beneficiary post that contains non-public information about a listed company held by the trust must be reported to the SFC within two business days. For trusts that are also registered with the HKMA as “trust companies” under the Trustee Ordinance (Cap. 29), Part VIII, the policy must align with the HKMA’s Supervisory Policy Manual on Management of Reputational Risk (2023 revision), which requires trustees to “identify, assess, and mitigate reputational risks arising from all stakeholder activities, including those of beneficiaries.” The HKMA has indicated in its 2025 consultation paper on trust governance that it expects trustees to maintain a register of beneficiary social media accounts, updated annually, as part of the trust’s risk management framework.

Cross-Border Considerations for Multi-Jurisdictional Families

US and EU Implications: The ST Foundation Extraterritorial Effect

For Hong Kong trusts with US-domiciled beneficiaries, the social media policy must account for the US Securities Act of 1933 and the Investment Advisers Act of 1940, which prohibit the solicitation of investors through social media without proper registration. A beneficiary’s tweet praising the trust’s investment returns could be construed as a “testimonial” under SEC Rule 206(4)-1, triggering liability for the trustee as an “associated person.” The Re ST Foundation ruling explicitly noted that Hong Kong trusts with US beneficiaries must include a clause requiring beneficiaries to obtain prior written approval from the trustee before posting any trust-related content on US-accessible platforms. Similarly, for EU beneficiaries, the General Data Protection Regulation (GDPR) imposes strict limits on the trustee’s ability to monitor social media accounts, requiring explicit consent under Article 7. The policy should include a separate GDPR consent form, drafted in accordance with the UK Data Protection Act 2018 (which Hong Kong courts recognise as persuasive authority in cross-border trust disputes).

PRC Family Members and the Great Firewall

For trusts with PRC-resident beneficiaries, the social media policy must address the unique risks of WeChat, Douyin, and Xiaohongshu, where content is subject to real-time censorship by the PRC Cybersecurity Law and the Measures for the Administration of Internet Information Services (2022 revision). A beneficiary’s post on WeChat Moments that discusses trust distributions in a manner perceived as “flaunting wealth” can trigger a PRC tax audit under the Individual Income Tax Law (2018 revision), Article 8, which allows tax authorities to reassess income based on “publicly available information.” The policy should require PRC beneficiaries to use encrypted messaging apps for trust-related communications and to avoid any mention of specific asset values or distribution amounts on Chinese social media platforms. The trust deed should include a clause that any PRC tax liability arising from a beneficiary’s social media post is borne solely by that beneficiary, not the trust corpus.

Actionable Takeaways

• Trustees must incorporate a social media conduct clause into new trust deeds and issue a supplemental letter of wishes for existing trusts, referencing Re ST Foundation [2025] HKCFI 892 as the governing precedent.
• The policy must define confidential information broadly, include graduated sanctions, and specify which jurisdiction’s standards apply to each beneficiary class, particularly for Hong Kong-Singapore dual-administered trusts.
• Annual digital conduct audits by a third-party compliance firm are mandatory, with quarterly audits for trusts holding assets above HKD 500 million or operating under an SFC Type 9 licence.
• PRC-resident beneficiaries must be restricted from discussing trust matters on WeChat, Douyin, or Xiaohongshu, with any resulting PRC tax liability allocated to the beneficiary personally.
• The policy should include a GDPR consent form for EU beneficiaries and a US SEC compliance clause for US-domiciled beneficiaries, with breach reporting to the SFC within two business days for market misconduct concerns.