We provide an overview of practical tools that successful families have used for centuries. Get inspired and create a plan that will have your descendants talking about you with respect for generations to come.
- Family Constitution: This is an agreement between family members that sets the rules for how the family will treat their property and business. It contains values, visions and rules for the involvement of members in the management of assets, i.e. also the management of the family business. It is a tool that helps prevent conflicts and ensures harmony between generations.
- Family Council: A group of family members that meets regularly to address issues related to the family estate and business. It can act as a “council of elders” that sets key directions for the assets, investments and family members’ involvement in the business.
- Trust Fund: used to protect assets. The founder puts assets into it, which are then managed by a trustee according to predetermined rules. The trust protects the assets from risks while allowing the beneficiaries (family members) to draw benefits, such as income, from them. The family council can play an important role in recommending or approving a trustee if this is provided for in the trust’s statutes. In this way, the family can ensure that the trustee is aligned with its long-term values and goals. The trustee may be appointed by the family council.
- Endowment Fund: Unlike a trust fund, where the assets remain “ownerless” and are managed by a trustee according to the statutes, an endowment fund, as a legal entity, has its own bodies (e.g. a board of trustees) that decide on its management. An endowment fund is suitable for families who want to protect their assets and at the same time use part of them for beneficial purposes. In addition, it can be more flexible to meet legislative requirements and support long-term projects that go beyond family assets.
- Holding: Is the parent company that owns and manages several other companies. This model allows for simpler management, asset protection and risk allocation. With a holding company, for example, you can separate the operating business from the fixed assets, which increases the stability of the company.
- SICAV: Is a joint stock company with variable share capital that is used to manage assets and investments. It provides favourable tax conditions (e.g. 5% income tax) and the ability to easily separate different parts of the assets or business. It is an ideal tool for families who want to manage assets efficiently and ensure their growth for future generations.
