There have been hundreds of trust funds established in the Czech Republic, since the corresponding law was passed four years ago. These serve for keeping assets for ones’ children or even to protect the assets against them.
The estimates say there have been between 700 and 1000 trust funds established.” says Michal Dobrovolný of Smart Companies in an interview for Právo. The number of funds is expected to further grow in the coming years.
“The law is quite liberal, making the conditions for the establishment of funds quite variable,”he added. Trust funds are an alternative for survivors’ proceedings and wills, and/or are used in situations where assets need to be “put away” for whatever reasons and stop being the legal owner of them.
Security Tomáš Pacovský, a partner in APOGEO Group, says the reasons for creating such funds include the transfer of assets and businesses between generations and the mitigation of business risks. “It is reasonable to establish a fund in good time, before more assets are accumulated.
It provides the desired security,” added Bořivoj Líbal of PwC Legal. Protection against execution As an example, Pacovský has recently established fund for an elderly lady who used it for an apartment in Prague, which she shares with her son, who is not very self-sufficient. The mother wishes him to live in the apartment after she dies, so that no one can deceive him or trick him into selling it. She has clearly defined the rules, which will now be supervised by a professional administrator. The cost of establishing the fund for an apartment worth several million was a hundred thousand Czech crowns.
However, the fund’s assets cannot be used for the purpose of calculating subsistence allowance, because they are no longer held by the original owner.