Family trust is a kind of property management method that trust institutions are entrusted by individuals or families to manage and dispose of family property on their behalf, so as to achieve the goal of wealth planning and inheritance for the rich. It first appeared during the 25-year economic boom, and was called the second gilded age in America. Family trust is the separation of asset ownership and income right.

Once the rich entrust the assets to the trust company, the ownership of the assets will no longer belong to him, but the corresponding income will still be collected and distributed according to his wishes. If the rich divorce, property division, accidental death or expropriation, the money will exist independently and will not be affected. Family trust can better help high-net-worth people plan "wealth inheritance", and it is gradually recognized by the rich in China.

Extended data:

The four major risks of trust funds are as follows:

1, capital preservation risk

The risk of capital preservation has a low probability of principal loss, but the probability of principal loss is not completely non-existent, and the trust plan does not promise capital preservation. When the securities market falls sharply and it is too late to stop the loss and close the position, there may be a situation that the net loss exceeds the "buffer pad", and then the principal of the priority customer will lose money.

2. Interest rate risk

Generally, domestic interest rates are adjusted once a year, and one-year trust funds generally do not generate interest rate risk. Trust funds with a term of more than 2 years need to look at the contract terms signed by the fund. From the perspective of the use of trust funds, trust funds used for loans will generally agree with borrowers that the loan interest rate will be adjusted with the central bank, thus avoiding interest rate risk, while trust funds used for equity investment repurchase will determine whether they can avoid interest rate risk according to their agreement with the investee on interest rate changes.

3. Credit risk

The magnitude of wind risk determines whether the investor's principal can be recovered smoothly and whether the expected income can be realized smoothly, so it is also the risk factor that investors are most concerned about. Infrastructure is superior to real estate investment and other project types, trusts applied to large enterprise groups are superior to trusts applied to general companies, and trusts with sufficient mortgage and guarantee are superior to general credit trusts.

4. Liquidity risk

The existing trust products can only be transferred by contract, and there is no formed transfer market, which is more risky than the liquidity risk of stocks, bonds, funds and other varieties. However, when designing trust products, trust companies have already given enough income compensation for this risk.

Baidu Encyclopedia-Family Trust

Baidu Encyclopedia-Trust Fund