Family members’ disputes over property distribution are not uncommon.In lawsuits that have been filed by wealthy families in China and Hong Kong, Family Trust Funds has acted as the firewall to respect and implement the wishes of the trust founder. The family trust is widely regarded as the best wealth transfer mechanism. It also can help to protect family assets from being depleted due to protracted disputes.
For high net worth individual, the family trust is an effective way to divide property. The trust founder authorizes the trust institution to manage assets on their behalf. Once a trust is established, it is entirey independent. Neither divorce, bankruptcy or the death of the founder will affect the trust.
The trust is a superior guardian of family assets than traditional will. Many entrepreneurs have infused their enterprises into the family trust so that their spouse and the descendants can obtain the trust equity income as a beneficiary. It does not involve changes in the company’s equity, thus eliminating risks including company stakes being sold or divided due to family members’ disputes or of controlling shares from being shaken.
Hong Kong is an international financial centre with well-established laws and systems. And it is also closely connected to mainland China. These factors have made Hong Kong an ideal place to set up family trusts. Many Hong Kong tycoons have established trusts years ago and held their listed companies shares through their respective family trust funds.
Benefit from our legal advisors, accounting, tax and investment experts, TG Wealth is well-suited to provide comprehensive trust fund management services with a high level of professional knowledge, ethics and management standard. From administration to investment and distribution, we guarantee the wishes of the rust founder can be fully respected.
Distinctive Competencies of a Family Trust:
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No one can subvert the trust except the trust founder.
The testator may or may not be of sound mind when writing the will, and issues of authenticity may cause legal challenges and disputes over the validity of the will.
Children with mental handicaps, minors in divorce cases and elderly parents can receive continued financial support via the trust. Beneficiaries have the right to the proceeds of the trust, but they have no right to dispose of the trust assets (such as sale, transfer, gift or name addition).
The heir receives the inheritance in one lump sum. However, if they do not have knowledge on investment or wealth management, they may squander the inheritance easily.
The trust assets are treated as stand-alone assets. Creditors of the trust founder have no right of recourse under any circumstances, even if the founder declares bankruptcy. (Note: The trust must have been established for more than three years to be valid)
The will is subject to debts and tax payments before it is distributed to the heir.
Regardless of whether the founder is alive or not, the funds can be operated immediately upon established. The assets can be increased or injected at any given time without the hassle of altering any documents.
After the testator‘s death, the estate can only be inherited after a proper procedure and when the estate taxes have been paid.
A professional trust institution (trustee) makes stable investments under terms and conditions.
After the heir has obtained the inheritance, he or she can use it for themselves. If it is not handled correctly, the property can be liquidated based on a whimsical decision.
Disclosure can be avoided if a shareholder transfers his/her personal asset to a trust before the company’s listing.
Information is kept confidential at the discretion of the testator’s will.
Assets are not subjected to inheritance tax.
Estate taxes are payable under local regulations. China is moving towards a modern taxation system that may include gift tax and inheritance tax.
We provide excellence services from deed establishment, routine management and administration:
1) Assign a team of lawyers to set up and review the trust deed.
2) Supervise and implement the trust fund based on the trust deed.
3) Assign a portfolio manager to manage the assets and investment portfolios.
4) Provide a comprehensive investment audit report on the performance of the fund/investment portfolios.
5) Supervise the performance of all the teams responsible for the trust fund.