Family Investment Company or Trust?
Protecting Your Wealth for Future Generations: Family Investment Company or Trust?
It takes the lifetime to create wealth. In many countries it takes months and even years to pass it on to the heirs once the family’s creator of the wealth passes. During the process of transfer of inheritance to the family members – the legal term for this process is called probate, the family will not have access to the assets of the deceased family member. The problem of wealth succession and estate planning becomes even more challenging if your assets are located in different countries. It takes the time, the cost, and the patience to identify and transfer the assets to the family. Some countries have compulsory transfers of assets to certain family members which may not be what the creator of the wealth intends – this is called forced heirship. Other countries have a heavy burden of inheritance taxes that need to be paid before the family can enjoy the wealth of the deceased.
Is there a way to help your family to get the assets fast and smoothly? Yes, Cyprus Family Investment Companies and Cyprus Trusts are the instruments that enable smooth and instant transfer of wealth to the heirs. Which one is better? This depends on the personal circumstances of each family.
Cyprus International Trust
If you do not have a family member who is willing and capable of continuing the family business, you need a solution that would enable your family to sell that business if you are not around and transfer the money to your family promptly or keep the money prudently invested for your family’s benefit. This can be achieved by a Cyprus International Trust.
A Cyprus international trust enables the owner of the assets to appoint a professional trustee to hold the assets for the beneficiaries. If the beneficiaries are not domiciled in Cyprus, there is no tax in Cyprus on the assets transferred to the trust and (or) distributed to the beneficiaries. The assets you transfer to the Cyprus Trust will not be a part of the estate on death, and so can be enjoyed by the family instantly based on the terms and conditions you prescribe in the Instrument of Trust. The forced heirship rules will not apply either and it is completely up to you to decide who and in what amounts should be benefitting from the wealth you created.
Cyprus Family Investment Company
Is your son or daughter your future successor in running your business? If yes, then a Cyprus Family Investment Company is also the solution that enable smooth transition of the ownership and control of the business to your successor without risking it being out of control for the period of probate and without the risk of the asset passing to a different person incapable of running it because of the prevailing forced heirship rules.
A Cyprus family investment company is a company that operates several classes of shares, some of which lose all rights on the current owner’s passing and the others instantaneously acquire these rights. The shares of the deceased owner will still need to be probated and they may need to transfer by forced heirship but as they carry no value or rights, this is a technical process which does not get in the way of business operation and management by your successor.
How we can assist?
Our lawyers have decades of experience in company and trust law and are qualified in Cyprus and England and are full members of the Society of Trust and Estate Practitioners. Whatever your personal circumstances are, we would be willing to discuss and suggest an estate planning solution for your specific case.