Separating personal and work life is often challenging. This is especially true when your closest family members are also your colleagues and business partners. It is important to prevent potential conflicts so that both the family business and family relationships can thrive. Properly structured ownership arrangements, especially trusts and endowment funds, can help.
Playing by the Rules
Not only external factors, such as an economic recession or financial difficulties, can threaten a family business built over many years. Even a well-established business can start to crumble when disputes about its future arise and persist among relatives.
Using trusts and endowment funds can effectively prevent this for several generations ahead. It is enough that the fund's parameters are set correctly and tailored to the specific requirements of the founder. “It is precisely the client as the founder who sets the rules and decides how and under what conditions the fund can be managed,” says Lawyer Jakub Hollmann, partner at CCS Premium Trust.
A company with many years of professional experience in asset management today provides services to clients with a total wealth exceeding half a billion euros. CCS Premium Trust helps them set up appropriate procedures in advance for potential future crisis situations, as well as for the future transfer of the business. The fund is established not just for several years, but for decades.
“That’s why it must be able to respond to future challenges, whether it’s a change in the tax regime, the need for extraordinary healthcare for any family member, or a generational transition,” Hollmann adds.
“You decide how and under what conditions your assets will be managed in the future.”
Jakub Hollmann
A Solution for Slovaks
Unfortunately, Slovakia still lacks the necessary legal framework and suitable instruments to achieve results comparable to those of trusts or foundation funds in other Western countries. Since 2016, the Czech Republic has been one of these countries, offering Slovaks a straightforward way to secure asset protection, professional management, or intergenerational transfer. “Our clients come not only from the Czech Republic and Slovakia but also from many other European countries. They are attracted by the high degree of flexibility enabled by Czech legislation,” explains Hollmann from CCS Premium Trust.
A fund can be established by both individuals and legal entities through documentation that defines its purpose, founder, administrator, and beneficiary, as well as sets the fund’s duration. The assets in the fund can include real estate, movable property, artworks, or securities.
There is a simple rule: the earlier you establish it, the better. It doesn’t matter whether you are eighty-three or thirty-eight years old. If your assets exceed one million euros, deciding to organize them into a trust or foundation fund is the right choice.
The fund can serve as a complement to a family holding as a secure “vault” protecting part of the assets and enabling their distribution among family members. At the same time, it will safeguard your needs and comfort even after passing the “family silver” into the hands of the younger generation. This article was published in the Forbes Magazine (September 17, 2024)
