Case Study

Trusts Empowering Wealth Succession


    In this case, we delve into the concerns of Ms. Tang, a 60-year-old entrepreneur who is contemplating the issue of wealth succession. She is torn between using a will or a family trust and has sought advice from numerous professionals.


Key Differences between Wills and Family Trusts:

    Wills typically involve straightforward property arrangements, but in case of disputes, the inheritance process can become exceedingly complex and lengthy. In contrast, family trusts provide strong control for the grantor, enabling them to allocate wealth according to their wishes and determine the investment direction of the funds. Even in the event of the grantor's passing, the trustee will continue to manage the trust assets according to the contract's stipulations.

    Ms. Tang, through consultation with a trust advisor, learned about the distinctions between wills and family trusts. Ultimately, she chose to use a family trust as her tool for wealth succession. She placed all her assets within the trust, with a fixed quarterly withdrawal of 30,000 CNY for her living expenses. In case of a major illness, emergency funds could be allocated. After her passing, the trust assets would be distributed according to legal requirements.

Preventing Extravagance: To guard against extravagance, a provision is included in the trust conditions.


Benefits of Using a Family Trust:

  • Ms. Tang's late-life retirement would remain unaffected through the establishment of a trust, resolving concerns about wealth succession.
  • Clear trust conditions ensure that after Ms. Tang's passing, all assets will be evenly distributed among her children, avoiding complex inheritance procedures and property disputes.


Highlighted Features:

  1. Trust Fund Management: Under the trust conditions, trust managers oversee the investment and growth of Ms. Tang's assets.
  2. Long-Term Planning: Family trusts provide long-term asset planning and life security for beneficiaries, enhancing retirement security.
  3. Convenient Succession: Through the trust, assets can be directly inherited, avoiding estate taxes and inheritance fees.


    If you are currently dealing with wealth management planning concerns, consider exploring family trusts. If you wish to further enhance your wealth planning, we encourage you to contact a trust advisor for consultation.

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