In the face of dynamic economic and family changes, many property and business owners are looking for solutions that will allow them to protect their assets from division and ensure their durability for generations. A family foundation, as a new tool in the Polish legal system, is becoming an increasingly popular choice. What is a family foundation and how does it protect assets from fragmentation?
What is a family foundation?
A family foundation is an institution whose main purpose is to manage family assets and protect their substance from division. Unlike traditional charitable foundations, a family foundation is not focused on achieving social goals, but on increasing assets and supporting selected family members.
In Poland, the family foundation was introduced into the legal system in 2023, which opened up new opportunities for family business owners and people who want to protect their assets. The key feature of a family foundation is that once the assets are transferred to it, they become the property of the foundation, not individual family members.
How does a family foundation protect assets from division?
- Maintaining the integrity of the property – A family foundation operates as a single entity that takes full ownership of the contributed assets, such as real estate, company shares, or other valuable assets. Thanks to this, the assets remain in one hand and are not subject to division in the event of inheritance, divorce, or family conflicts. In practice, this means that the assets are not divided into smaller parts, which essentially leads to a loss of their value.
- Exclusion of property from the estate – One of the most common reasons for dividing assets is inheritance processes. In the case of traditional inheritance, assets are divided between heirs, which often leads to conflicts and unfavorable decisions. A family foundation allows you to avoid these problems, because the assets contributed to the foundation are not part of the estate. The founder of the foundation independently determines the rules for managing and using the foundation funds, which minimizes the risk of disputes.
- Protection from creditors – Contributing assets to a family foundation effectively protects them from claims from family members' creditors. As a separate legal entity, the foundation is not liable for the financial obligations of its beneficiaries. Thanks to this, family assets can be safe even in the event of financial problems of individual people.
- Ensuring management continuity – A family foundation allows the founder to create a long-term management plan that will be implemented even after his death. Thanks to the foundation, family businesses can be run in accordance with the founder's vision, without the risk of division or sale by heirs. The foundation's board is responsible for achieving the goals set by the founder, which allows for maintaining financial and organizational stability.
- Securing the interests of the family – A family foundation operates under a statute in which the founder specifies the rules for the use of the assets by the beneficiaries. This may include payments to cover living expenses, education, or other purposes. Thanks to this, the foundation provides support for family members while protecting the assets from their irresponsible decisions.
Summary
A family foundation is a modern and effective tool for protecting assets from division. It allows for maintaining the integrity of assets, ensures continuity of management and eliminates the risk of fragmentation of assets as a result of inheritance or other life circumstances. For entrepreneurs and owners of family assets, it is a solution that not only protects the assets, but also supports the development and prosperity of subsequent generations.
The introduction of a family foundation into the Polish legal system opens a new chapter in wealth management, giving families a tool that combines security, stability and flexibility. For many, it is a step towards building a lasting legacy that will stand the test of time.
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