Family Trusts for Your Wealth Management and Legacy

Domestic wealth management market is like a mirror, can reflect all kinds of different groups of people for product choices, if the net worth products in 2022 is not as expected by the public "hot", and another type oftrust managementOn the other hand, the year started unexpectedly in favor of high net worth individuals.

At the beginning of 2022, family trust quietly ushered in the "open door". Recently, China Trust Registry Limited Liability Company released the latest data show that in January this year, the trust industry new family trust size reached$12.899 billioncompared to the previous monthIncrease of 33.54%, hitting a new high in almost a year.

Since the outbreak, HNWIs have become significantly more concerned about passing on their wealth and, compared to traditional models such as wills, theFamily trusts are more secure and private in the implementation of wealth inheritance planning.

What's the trust?

fiduciarycredit commission, is a financial product established on the basis of the entrustment system. It is also a way of financial management, and together with banks, insurance and securities, it constitutes the modern financial system.

The functions of the trust are summarized as "manage people's finances on their behalf".

What is a family trust?

A family trust is aTrusts are commissioned by individuals or families, a form of property management that manages and disposes of family property on behalf of the wealthy in order to achieve the wealth planning and inheritance goals of the wealthy.

An example:

The family trust settlor is the owner, the house is owned by the settlor, and the trust company is the property company with only management authority.

Why choose a family trust

Why are more and more high net worth individuals choosing family trusts? Because of its following advantages:

★ Property segregation

When a principal delivers property to a family trust, the legal title to that property, has been transferred from the name of the principal to the name of the trustee's family trust.Effectively prevent the transmission of risks from other property to trust propertyand thus serve as property protection.

In the event of marital changes, debt disputes and other risks.The money in the trust is also not affected and the beneficiaries can still receive it.

An example:

There was a clip from the hit drama "Xiao Min Jia" a while back, featuring Qin Hailu as mom Li Ping, whose insurance fund family trust for her daughter was not affected (by the debt) even though her husband was accused of tax violations and other issues that led to the bankruptcy of the business the two ran together.

★ Wealth Enhancement

Trust companies are professional asset management organizations with the advantage of professional financial management.Asset portfolios can be personalizedThe globalization of assets allows for the preservation and enhancement of the value of the property.

★ Flexible settings

A family trust may, of the free will of the settlor and in accordance with the actual needs of the settlor.Flexibility in setting terms of duration, conditions for distribution of proceeds and ways of utilizing property managementIn order to realize various functions such as value preservation and appreciation, rights and interests protection, wealth inheritance, children's education, tax planning, family enterprise governance and family members' life protection, it allows wealth to flow over time and prevents beneficiaries from squandering their wealth.

An example:

After the famous Hong Kong star Anita MUI suffered from cancer, she wanted to leave her entire inheritance to her mother. However, Anita Mui's mother was addicted to gambling, so Anita Mui stipulated through a trust that she would give her mother HK$70,000 a month for her living expenses, which not only ensured that her mother could take care of herself for a thousand years, but also prevented her mother from squandering her inheritance on the gambling table.

★ Protection of privacy

The trust, as a fiduciary, is under a duty of confidentiality with respect to the privacy of its principals and beneficiaries.Can avoid security threats to beneficiaries due to disclosure of property informationThe

A family trust is not only a financial tool, but also a legal tool, and its greatest strength lies in the legal mechanism thatThe separation of powers and interests, freedom of trust purpose, independence of trust property and continuity of trust are reflected in better risk isolation.

Family trust perfectly matches the core demands of HNWIs in wealth management. With the popularization of the family trust concept, increased awareness, expansion of trust scale and lower service costs, it is foreseeable that more and more HNWIs, like the Rockefeller family and the Hsu family, will choose family trusts to manage and inherit their wealth.