1. Illegal income: If the trust funds come from illegal activities, such as money laundering, corruption and bribery, the state has the right to confiscate their illegal income according to relevant laws. This is to crack down on criminal activities and maintain social order.
2. Tax problem: If there are tax problems with trust funds, such as tax evasion, the state has the right to confiscate or recover relevant property according to the tax law.
3. Violation of the trust agreement: if the trust operation violates the provisions of the trust agreement, such as the purpose of the trust and the rights and interests of the beneficiaries, the state may confiscate or recover the trust property according to the trust law and other relevant laws.
It should be noted that the specific situation may vary according to the national legal system and specific cases. In some cases, the state may need to decide whether to confiscate the trust property through judicial procedures.
To sum up, the trust funds confiscated by the state are illegal income, tax problems, and violation of trust agreements.
Legal basis:
People's Republic of China (PRC) trust law
Article 11
If the trustor establishes a trust with illegal property or property that cannot be established according to this law, the trust is invalid. There are also relevant regulations in Hong Kong. Before establishing a trust, the promoters of the trust must sign a capital certificate to ensure that their capital comes from legal channels. Whether in the Mainland or Hong Kong, the legality of trust property is a prerequisite.