South Korean banks are eager to branch out into the trust fund market here, as the country’s demographic shift to an aging society has accelerated demand for it.

While it is common in the US and other countries to establish a trust fund for inheritance and keep assets within the family with minimal legal issues, a majority of Korean families still prefer passing on assets through wills. But today, more Koreans are seeking to manage their assets through trust funds, which gives grantors more legal power to manage their wills as the nation became an aged society in 2017.

On Wednesday, Hana Bank, one of the top four commercial lenders here, rolled out a trust fund that allows grantors to set aside costs for cremation and to pay for columbarium expenses upon their death. The remaining assets are then passed down to the grantor’s family members or beneficiaries.

The product includes benefits such as a 20 percent discount in using the columbarium and various consulting services provided by Hana on inheritance and guardianship. It requires minimum 10,000 won ($8.21) to a maximum 100 million won to start the trust.

Hana’s industry rival, KB Kookmin, is a forerunner in the trust fund market, launching the nation’s first pet trust in July last year. The trust allows the grantor to make contractual arrangements to designate a selected caregiver once the grantor dies. Any pet owner over the age of 19 is eligible to establish the trust and the asset is managed via exchange-traded funds, equity-linked securities, bonds and more.

Today, there are 14.48 million out of some 50 million Koreans who have pets, according to a report compiled by KB Financial Group last year.

KB Kookmin also has several trust funds focused on inheritance and caters to the aging society alongside Hana, Woori and Shinhan. Hana, on top of its latest product, offers its customers a trust fund that enables grantors diagnosed with dementia control over their assets.

“Koreans’ preference for trust funds have been growing as it allows the grantor control over his or her assets once they become mentally or physically incapacitated in this aging society,” a Hana Bank official said.

“Trust funds also gives tax benefits to both grantor and the beneficiary, and with the real estate prices surging by the year, more Koreans are eyeing the products,” the official added.

Asia’s fourth-largest trust fund market has grown in size in recent years, with the total trust fund asset managed by banks, brokerages, insurers and other financial institutions amounting to 1,227.4 trillion won as of end-January. The figure gained 26.5 percent compared with three years earlier, according to industry data.

Last year, the top four banks here -- KB Kookmin, Shinhan, Hana and Woori -- raked in a combined 795.5 billion won in commission from selling trust funds, Financial Supervisory Service data showed last month. The figure gained 20.7 percent on-year.

Korea became an aged society in 2017, in which the percentage of those aged 65 or older exceeded 14 percent of its population. The country is widely expected to enter a superaged society in 2025, when the percentage of the elderly will top 20 percent.