The significance of the location of trust fund accounts and assets is specified in the International Private Law Act. Specifically, the trust fund is primarily governed by the law of the Czech Republic. Continue reading “Location of fund assets and accounts”
The government is currently considering (included on the government’s agenda for the meeting on 5 October 2015) a major amendment of the Civil Code, the Act on Public Registers and other laws, which inter alia significantly affect the regulation of trust funds. The amendment will primarily introduce the mandatory registration of trust funds in the Register of Trust Funds and also govern the mandatory data to be included in the register. Continue reading “Mandatory registration of trust funds”
Being the trustee of a trust fund naturally carries certain responsibilities and risks. You should considered that as a trustee, you will be responsible for what happens to the assets in a trust fund. If you breach the obligation of due care in the management of the fund, do not manage assets properly, or you spend the resources from the fund yourself, you can be sued by the founder or beneficiaries. Continue reading “What are the risks of the duties of a trustee?”
No, it can’t; property allocated to a trust fund does not belong to you and is part of the trust fund managed by the trustee. This property has no owner, only an administrator; only the beneficiaries have the right to payment from a trust fund. Property in a trust fund is therefore completely untouchable by execution or insolvency, and so the establishment of a trust fund is appropriate to protect against such risks. Continue reading “If execution proceedings are initiated against me, can it affect the property in a trust fund?”
No. Czech legislation includes several instruments which enable supervision of the trustee through so-called supervision of the administration of the trust fund. According to the law, supervision is conducted by the founder of the trust fund, the beneficiaries and any other persons specified in the statute. The law also specifies what happens if there is no beneficiary or a beneficiary has not been designated. In this case, the founder appoints a person with the right to supervise the administration of the trust fund, and if he/she does not do so, then the court.
However, it is appropriate and essential to define the limits of supervision in the statute of the trust fund and specify the rights and obligations of the parties with the right of supervision.
Yes, under Czech law, an interest in a company is a property right and therefore a thing, and as such it can be dedicated to a trust fund. Therefore, if you own a company and you want to entrust its care into the hands of an experienced administrator in the future, while you or your children receive benefits therefrom, the best solution is to establish a trust fund.
Under Czech law, the founder can also be the trustee of his/her trust fund, but he/she cannot be the sole trustee. Therefore, if you want to be the trustee of your trust fund, it will be essential to have another co-trustee, who is neither the founder nor a beneficiary of the trust fund.
A testamentary trust fund can be established with a provision in the event of death (will).
By establishing conditions for payment, the founder can determine the purpose or otherwise control pay out to heirs, even after his/her death and prevent, for example, the misuse of assets.
The founder is thus assured his/her estate will be handled in accordance with his/her will, and can ensure the effective inter-generational transfer of his/her assets through a testamentary fund.
The founder of the trust fund can secure him/herself and his/her immediate family in the event of injury or death through the fund.
Such a trust fund can then be used, for example, to pay benefits on retirement, while studying, during injury or inability to work and so on.
A trust fund can also be established for the purpose of business and generating profit.
Moreover, the founder need not worry that creditors will be able to claim his/her remaining assets in the event he/she is not successful, as his/her assets are separated from fund assets on the establishment of the trust fund.
Profits can then also be divide among the persons designated in the statute, even those different to the beneficiary. The law thus effectively allows other investors in the fund as sharers in profit.