Markéta Flanderková: Trust funds are not just a tool for intergenerational transfer; they are also used by startup founders.

Intergenerational transfer of assets remains a “driving force” behind the creation of trust funds. There are already nearly five thousand of them in the Czech Republic, and their number increases every year. More and more often, however, entrepreneurs are also using them, “discovering” in them a means to protect assets while carrying out new business ventures.

“The founder of a start-up divides the assets, placing part of them into a trust fund while retaining ownership of the other part, thus separating ownership. If the entrepreneur later incurs liability from their business activities, the assets placed in the trust fund will not be affected,” says Markéta Flanderková, senior consultant at CCS Premium Trust, in a podcast by Hospodářské noviny.

According to her, setting up such funds for start-up founders is definitely simpler than for intergenerational transfers. “The amount of assets is smaller, usually fewer relationships involved, so there’s less that needs to be arranged,” she adds, noting that such a trust fund can be established within a few weeks.

Setting up a trust fund for intergenerational asset transfer usually takes several months. In one case, where a client had a holding company with several firms, building the trust fund took two years. “It’s a process that involves defining goals, priorities, conditions, division of roles, responsibilities — all done with the founder or founders, since a trust fund can also be established jointly by spouses,” Flanderková points out.

Author: Libor Akrman

You can listen to the full podcast on the website Hospodářských novin (September 27).