Trust Fund I.

In collaboration with the advisory firm Kreston A&CE Group, we are preparing a series of articles exploring both traditional and lesser-known aspects of trust funds.

In recent years, trust funds have become an increasingly popular tool for managing and protecting family assets. Although this legal concept has deep historical roots, it is now widely used in many legal systems around the world. A trust fund operates by allocating assets by the founder, who ceases to be the legal owner of those assets and entrusts their administration to a trustee. The trustee manages the assets in accordance with the fund's statute and for the benefit of designated beneficiaries.

The main participants in a trust fund are the founder, the trustee, and the beneficiary. The founder sets the rules for managing the fund through a statute, offering a high degree of flexibility. The statute may specify, for example, how the trustee is appointed, how beneficiaries are selected, or the conditions for the disbursement of funds. A trust fund can serve various purposes, such as asset protection, inheritance planning, family wealth management, or philanthropic goals.

Thanks to its flexibility, a trust fund can be tailored to the specific needs of the founder—whether it's for smaller estates or long-term dynastic trusts managing assets across generations. In practice, trust funds are used for a wide range of objectives, from safeguarding wealth to succession planning and charitable purposes.