【Asset Allocation and Wealth Optimization Trusts】

Mr. Fung’s Use of a Family Trust for Wealth Preservation and Succession

Mr. Fung is an entrepreneur with an extensive range of businesses. Over the years, he has amassed considerable assets domestically and internationally, owns several manufacturing plants, maintains a stable supply chain network, and invests in various domestic stocks, bonds, and funds in both developed nations such as Europe and the U.S. as well as some emerging markets. Additionally, he holds commercial real estate and has distribution rights for certain brands in these regions.

With the increasing complexity of the global economic landscape and adjustments in the domestic industrial structure, Mr. Fung recognized the need for scientific asset allocation and professional management. This approach helps address risks arising from currency fluctuations, changes in trade policies, and heightened domestic market competition. Mr. Fung has a son and a daughter; his son, after studying abroad, plans to build his career overseas, while his daughter is actively involved in managing the family business in the domestic market. Mr. Fung hopes to support his children’s future development through a strategic asset allocation plan while ensuring the steady inheritance of family wealth.

Mr. Fung has consolidated all his domestic and overseas assets into a trust, which then systematically reviewed and categorized these assets. For his domestic manufacturing plant assets, the trust collaborates with professional industrial appraisal teams and business management consultants to evaluate operational status and asset value. In terms of asset allocation, the trust fully considers the correlation and complementarity between domestic and international assets. On one hand, it increases overseas investments in companies supplying imported raw materials relevant to domestic manufacturing. This integration of upstream and downstream supply chains reduces risks related to raw material price fluctuations and trade frictions.

Regarding wealth succession, the trust has developed a detailed inheritance plan, distributing assets based on the children’s progress and contributions. Additionally, the trust established a family charter outlining business values, social responsibilities, and principles for wealth usage. Regular family meetings and training sessions help instill family culture, nurturing the children’s sense of responsibility to the family and strengthening their business acumen, thereby ensuring the transmission of family wealth and culture.

Through the family trust, Mr. Fung achieves tax optimization and wealth succession. Establishing the family trust has facilitated the scientific integration and optimal allocation of his domestic and international assets, effectively mitigating risks posed by economic changes and market fluctuations. The trust’s personalized design and professional management provide precise financial support for the children’s differing career paths, catering to the son’s entrepreneurial aspirations abroad and the daughter’s development within the family business. This approach unlocks their potential, injecting new vitality into the family enterprise.

A comprehensive wealth succession plan and mechanism for passing on family culture ensure smooth intergenerational transfer of family wealth. It fosters a sense of responsibility and business acumen in the next generation, passing down the family’s business wisdom and values, and providing robust support for the long-term development of the family.