A family foundation is a modern solution for entrepreneurs who want to secure their assets and ensure business continuity. Thanks to a foundation, the assets remain in the family, minimizing the risk of inheritance disputes. In Poland, family foundations offer preferential taxation, which reduces the costs of succession. However, there are costs of establishment and management, and the activities of a foundation are strictly regulated by law. It is therefore worth considering it with larger assets or a family business to avoid inheritance problems and ensure the stability of the company.
Benefits of establishing a family foundation:
- Protection of assets: The assets contributed to a family foundation are separated from the founder's private assets and protected from potential creditor claims. This allows you to secure real estate, companies or other valuable assets.
- Smooth succession: A family foundation helps avoid inheritance disputes and property fragmentation. The founder determines the rules of inheritance and the manner of using the property, which increases the financial stability of the family.
- Preferential taxation: Family foundation income is taxed on favorable terms. Payments to immediate family members are exempt from personal income tax, which allows for tax optimization.
- Control over the business: The foundation can conduct limited business activities, such as managing real estate or investing in securities. This allows it to maintain control over key family assets.
Challenges and costs:
- Costs of setting up and running: Establishing a family foundation involves legal and notarial costs as well as ongoing administrative costs, including accounting, tax and management costs.
- Regulations and provisions: Running a family foundation requires knowledge of legal regulations and strict adherence to the regulations introduced. Among other things, it is necessary to draw up a statute, maintain documentation and regularly settle the foundation.
- Less flexibility: After the founding assets are contributed to the foundation, the founder loses full ownership rights to them. Decisions on payments and management are made in accordance with the provisions of the statute, which may limit freedom of action. Nevertheless, an appropriate construction of the foundation's statute and a well-thought-out strategy for contributing assets to the foundation can significantly eliminate this challenge.
Who is a family foundation a good solution for?
A family foundation is especially recommended for people with significant assets or entrepreneurs who want to protect the company from division and ensure its development for subsequent generations. It is also a good solution for families planning effective succession while taking into account favorable tax solutions.
In summary, a family foundation in Poland is an attractive tool for property succession, but it requires a well-considered decision, appropriate legal and financial advice. Its establishment can bring many benefits, provided that it is well planned and tailored to the individual needs and goals of the family.
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