Ms. Wang, who has worked hard in Hong Kong for many years, owns a property and several million in assets that she wishes to pass on to her son.
Initially, she considered passing on her assets through a notarized will but worried her son might become complacent and squander the wealth.
After extensive consultation, she ultimately decided to utilize a family trust for inheritance.
Ms. Wang incorporated her family values into the trust deed, stipulating that her son must hold a legitimate job as an adult to live in her property. Any sign of misconduct would revoke his residence rights. Additionally, she set up an incentive mechanism: when her son earns his first significant sum, he will receive a double cash reward, motivating him to uphold the family spirit.
Family Trusts: Preserving the Family Spirit
If a family lacks strict values and a strong family culture, even if material wealth can be passed on temporarily, it cannot sustain itself over generations without a cultural and spiritual foundation. A well-established family culture can clarify the rights and responsibilities among family members, reduce internal conflicts, and unify their direction, which is crucial for continuing the family legacy.
A family trust not only preserves wealth but also upholds family values. When establishing a family trust, the settlor can require beneficiaries to meet specific conditions to receive distributions. If a beneficiary disregards family values, their rights to benefits can be revoked. This structure effectively motivates and restrains future generations, ensuring the continuation of a positive family culture.
