【Family Business and Wealth Succession Trust】

Mr. Jiang is the head of a large construction company, holding 75% of the company's shares, with the remaining 25% held by a core team of senior executives through an employee incentive plan. Mr. Jiang has two sons and two daughters, all of whom are married. His daughters married and moved overseas, where they work in fields unrelated to construction. Although his sons remain in the country, one works in finance, and the other in technology, showing little interest in the construction industry.

Mr. Jiang also has four grandchildren who live domestically and are still in primary and secondary school. Thanks to the family’s privileged conditions, these children enjoy material comfort and have developed some habits of extravagance, especially his eldest grandson, who is very fond of branded clothing and electronic devices, in stark contrast to Mr. Jiang’s simple and frugal style.

In conversations with friends, Mr. Jiang, seasoned and thoughtful from a life of challenges, has inadvertently expressed his worries. With age affecting his health and energy, he finds it difficult to manage the company's daily operations. He fears that, after his passing, his children’s division of his shares would dilute ownership and potentially compromise the control of the company he painstakingly built over his life. Watching his grandchildren’s affluent lifestyles, he worries that the family wealth might not endure, possibly succumbing to the “three-generation curse” of wealth loss.

Mr. Jiang uses a family trust to achieve an orderly transfer of wealth across generations:

1. Equity Trust: By placing shares in trust, Mr. Jiang ensures stable company operations during times of poor health and beyond. This prevents the risk of dispersed control due to share dilution, allowing the company to develop sustainably and generate steady returns for the family.

2. Education and Growth Fund Trust: This trust fund helps the grandchildren gradually curb wasteful habits and encourages them to value education and character development, participating more in social and charitable activities. Seeing rewards for diligent study and thrift, Mr. Jiang's eldest grandson has reduced his excessive desire for branded items, focusing more on self-growth. Over time, the grandchildren, guided by the trust, acquire financial literacy and an entrepreneurial mindset, laying a foundation for the continuity of family wealth.

3. Living Security Trust: This trust provides stable financial support to Mr. Jiang's children and their families, allowing them to live with peace of mind and pursue their own careers. Additionally, incentives for participating in charitable activities boost family members' sense of social responsibility, enhancing the family's social reputation and cohesion.