In the legal world of the Czech Republic, trust funds are still new. Most people connect them to dealing with situations within the framework of business relationships, but the scale of their use is much wider.
In the past, they were used primarily to protect property, and can now be used in both private and corporate areas. Among their other purposes, the protection of the interests of the beneficiaries, the fulfillment of the will of the founder or the socio-educational aspects that contribute to the development of the whole society can be added.
The trust provides asset protection against potential creditors, risks of business operations etc.
The other purpose of their creation is not the interest of the founder of the property but rather the protection of the interests and life needs of the beneficiary, the distribution of property, etc .;
Some of you may not know what other reasons for creating trust funds are. In particular, achieving an equitable distribution of property among the survivors, granting different rights to entitled persons, carrying out charitable and charitable activities, and engaging and educating the estate successor.
With regard to the retention of the family business by trust, many entrepreneurs in the 1990s are now faced with the decision to lead the company. Mostly before this decision is between 50 and 60 years of life. Children of the founders of these family businesses can have a successful career elsewhere or do not have the right character to manage the company. In order not to lose one’s life-long work, there is a trust fund. Its administrator ensures professional management of the company and generates the profit distributed among the beneficiaries, ie the children or grandchildren of the founder of the company. The administrator can also decide when the profits from the company will be paid to the beneficiaries, such as when living a decent life, not drinking alcohol, taking care of the founder of the company,
The Trust is widespread in the countries and a successful legal form of asset protection- check this source. This is the legal relationship between the persons from whom one property is managed in order for the other person to benefit from it. Most often, so-called trusts are explicitly established, which arise in such a way that the founder separates part of his property in the will or lifetime of the contract. There is also a public trust for charity purposes. Typical is also a private trust that works for people who want to bring their property to small children and assign another person to manage it well until they are of their age.
The engine for establishing the Trust Fund may also be to achieve investment objectives. Trusts provide risk fund diversifiers with trustees. Thanks to them, the investor reaches the desired anonymity and can separate the investment property from the personal property, thus protecting it from potential collapse.