If you have 1 100 million yuan, you can consider family trust-a good way to inherit wealth.

Family trust is a form of trust. The main purpose of family trust is to provide a mechanism for the grantor to transfer his property to the trust beneficiary in a planned way in the most tax-saving way.

Suppose Lao Wang's company is acquired by a big consortium. Lao Wang got shares worth 1 billion dollars from the acquisition. He sold some stocks and bought several big houses, some funds and several luxury cars. Lao Wang is now in his sixties. He is old and his son is only in his early twenties. He is studying in Australia and will graduate soon. Lao Wang has the following questions to consider when considering passing on his property to his son.

1) Lao Wang doesn't want to give his son a large sum of property at once, so that his son feels that wealth comes too easily and loses the motivation to work hard. Lao Wang was born in the countryside, knowing the bitterness of poverty and the corrosiveness of money to a person.

As Warren Buffett, an American investment guru, said: You should give your children just the right amount of money, so much that you dare to do anything and so little that you can do nothing. Therefore, for Lao Wang, the ideal inheritance procedure is a planned, gradual and controlled process. For example, how much for a son to get married, how much for a child to be born, how much for a grandson to go to school, and so on. So for his son, he can't sit in an empty seat, but he still has to make his own efforts for his career and pursuit.

2) Lao Wang is worried about his son's transfer of property. For example, when Khan's wife divorced, her son faced the problem of property division, and Lao Wang did not want his property to be divided by his wife. After all, this is the hard accumulation of thrift since the old Wang Duonian.

3) Pharaoh's two apartments are in Australia. If you transfer the property to your son, you have to pay taxes to the government, such as inheritance tax, gift tax and stamp duty, and give your money away to others. I'm a little overwhelmed at the thought of this little heart.

4) Lao Wang is a playboy. When I was young, I had a little lover. Later, my wife caught me. Lao Wang gave San Xiao a sum of money and broke off the relationship. But when I was in love, I gave her many vows of eternal love, and even wrote an affidavit and an iou: I must marry you and go home in the future. I owe you 100 million in my life. At that time, Lao Wang didn't have that much money, so he didn't think much. Now that Lao Wang has developed, he is worried about this unexploded bomb.

To understand family trust, we must first understand these concepts.

1) Property Client: Client. A person who sets up a family trust to give up his property. In the above example, it refers to Lao Wang himself.

2) Trust beneficiary: beneficiary. Refers to the object of property sponsorship in a trust. In the above example, it refers to Xiao Wang, the son of Lao Wang.

3) Trustee: Trustee. A housekeeper who manages property in a trust. This is a very important role. Legally speaking, Lao set up a family trust, and the ownership of these properties was transferred from Lao Wang to the trustee of the trust. In other words, these properties are not Pharaoh's, but the trustee's.

Therefore, it is very important to find a suitable trustee when setting up a family trust. Trust trustee can be an individual or a professional trust company. The main difference between the two is that if the trustee of a personal trust is seriously ill or dies unexpectedly, it will affect the operation of the trust. A professional trust company can ensure the professional operation of the company team.

4) trust: trust. Old Wang Can put all the property he wanted to inherit, such as house, company stock, cash and so on, in the trust. Trust is also a legal document. In the document, Lao Wang needs to elaborate on many details. For example, what is the main purpose of the trust, how many assets can be distributed to the beneficiaries of the trust under what conditions, how many years to distribute, what the trust can invest and what it can't invest, and so on.

To sum up here, a trust is a legal document established by a property trustee, which transfers the ownership of its own property to the trustee of the trust and distributes the property to the beneficiaries in a planned way according to the provisions of the legal document.

Benefits of trust:

1) Avoid property disputes within the family. In the trust, the beneficiary, how much everyone should get and how much property they can get under what conditions are clearly defined. Then it will be the trustee of the trust, not the trustee of the property. For example, how many children do the client and different wives have? In this case, the property trustee can hand over the hot potato of how to divide the cake to the trust trustee.

2) Divide the property to avoid transferring the debts of parents to the next generation. In China, there is an old saying that "a father owes his son". If dad owes a lot of debts and still can't pay them off, it seems natural for his son to go up and pay his debts. Family trust can provide a solution to this dilemma.

For example, suppose Lao Wang owes someone a hundred million dollars outside for some reason. In the absence of trust, even if Lao Wang gives his house to Xiao Wang, his creditors can still ask Xiao Wang to sell his house to pay his debts through litigation. If Lao Wang sets up a family trust, his creditors have a time limit (two years in Cook Islands) to collect debts.

If the creditors don't sue after the trust is established for two years, then the property in the trust is regarded as an asset independent of Lao Wang, and there is no danger of being recovered in the debt dispute between Lao Wang and the creditors.

3) Tax avoidance: mainly can avoid inheritance tax and gift tax.

Family trusts can also be established in China. Several large trust companies in China started to set up family trusts for domestic ultra-high net worth customers (generally, the net assets are above 500 million RMB, and the minimum amount of trust funds is above 50 million RMB) around 20 12.

One of the problems in the establishment of trust in China is that its trust registration follows the principle of "registration takes effect", that is, trust property can only take effect if it is registered according to law. Therefore, when establishing a trust with family property that needs to be registered, the property trustor must register and publicize its property. In other words, China's family trust can't protect family privacy, so this is a taboo for many rich people in China.

Suppose that the property trustee (such as Lao Wang in the above example) is applied for bankruptcy liquidation by the creditor because of poor management after setting up the family trust. In the case of trust registration, family trust, as trust property, should be protected by "bankruptcy isolation" and not included in the liquidation assets. However, there are no relevant implementation rules for bankruptcy isolation in China. In addition, in the current family trust, the trustor still has considerable control over the trust property. Then the validity of the established family trust property can only be judged by the court. As a result, it is hard to say whether the family trust established in China can achieve the above-mentioned purpose of "isolating assets".

Due to the current predicament of domestic trust, the rich gradually turn to overseas trust. Overseas, the most popular areas and countries where family trusts can be established are Hong Kong, New Zealand and Cook Islands. Family trust laws in each country are different and have their own strengths, but the whole framework is still similar.

Family trusts in Hong Kong and Cook Islands are basically similar. Family trusts in both places can be exempted from capital income tax, stamp duty and inheritance tax. From the Chinese point of view, it is a good choice to set up family trusts in Hong Kong and Cook Islands. Because Hong Kong is close to the mainland, its geographical position is favorable. Cook Islands has the earliest and most comprehensive overseas assets protection trust law in the world.

In practice, every problem has many different solutions, which vary from person to person and cannot be generalized. One thing is certain. Before setting up a family trust, the property trustee needs to do a good job of investigation, clearly understand what can and can't be done in the trust structure, and then make a decision after thinking clearly.