In the case of a trust fund, there are involved up to three persons, namely the founder (owner of the family business), the trustee (the executive body of the fund), and the beneficiary (the person who benefits from the fund). The founder of the family business sets aside some assets and entrusts them to a third party (trustee). However, no one owns these assets anymore and they will not even be part of the inheritance process. The fund’s assets can be used by the beneficiaries after fulfilling conditions created by the founder.
Assets protection
Since no one owns the assets in the trust fund, no one can jeopardize these assets. Since the assets in the fund are not part of the inheritance, you can avoid the possible future implementation of inheritance tax or millionaire’s tax that has already been implemented abroad.
Transfer of assets to future generations
By establishing a trust fund, in comparison to the inheritance process, it is possible to determine for the next years what will happen to the assets that the founder of the family business wants to bequeath to his descendants or persons outside the family after his death, and may also set conditions for the beneficiaries to use assets in the fund. The allocated assets will be transferred to the trust fund after the founder’s death.
Succession in the family business
Family businesses that deal with the question of how to secure the next generations of their descendants during the lifetime of the founder of the family business can use trust funds as an extension of the holding structure. The allocated assets will be transferred to the fund during the lifetime of the founder.
In the trust fund can be invested movable assets, immovable assets, and financial assets.