Is the threshold for family trust too high? 3 strategies to effectively lower barriers to entry

At present, the threshold of a family trust of more than 10 million yuan does hinder many families from enjoying its benefits. As pointed out at the 2022 Banking Industry Development Forum, high thresholds turn family trusts into a "rich man's game" and ignore the needs of ordinary families, especially minor children, disabled people and the elderly who need asset protection. Only by lowering the threshold for family trust can more families benefit from its value in wealth inheritance, risk management and asset protection. In actual practice, it is recommended to start with product innovation and develop simple trusts for different asset sizes; at the same time, we call on the government to provide policy support, such as tax incentives to reduce establishment costs; finally, we should actively enhance public awareness and let more people understand the family. The true value of the trust. Only in this way can family trusts truly benefit more families and achieve effective planning and inheritance of wealth from generation to generation.

The practical advice in this article is as follows (read on for more details)

1. Actively pay attention to low-threshold family trust products:The current high threshold for family trusts does limit the participation of many families. It is recommended that you pay close attention to the emerging "simple family trusts" or other low-threshold trust products on the market. These products are usually designed for families with smaller assets and can more efficiently use family trusts for wealth inheritance and asset protection. Take the initiative to consult with a wealth management consultant to learn about products suitable for your family situation. Don’t be deterred by the high threshold.
2. Assess family risks and needs and plan ahead:Even if the current asset size does not meet the traditional family trust threshold, family risks should still be assessed. If you have minor children, elderly parents, disabled family members, or a family business that needs to be passed on, you should plan early and consult professionals. Even if a formal family trust cannot be established in the short term, you can still use other wealth planning tools, such as wills, insurance, etc., to prepare for asset protection and distribution in advance, laying the foundation for establishing a low-threshold trust in the future.
3. Continue to pay attention to policies and tax incentives:The government's support policies for family trusts and related tax incentives will directly affect the establishment costs and thresholds. It is recommended that you continue to pay attention to financial news and related policy developments to understand whether the government has introduced new support policies, such as tax exemptions or simplified establishment procedures, so that you can plan your family trust plan more efficiently when the policies are favorable.

Family trust under high threshold: Who can benefit?

At present, family trusts generally have high thresholds, and usually require an asset size of at least 10 million yuan to be established. This high threshold actually excludes most families, making family trusts only able to serve a small number of high-net-worth individuals, forming a "rich man's game" phenomenon. However, this does not mean that the value of family trusts is limited to the wealthy. In fact, many middle-income families also face challenges in wealth inheritance, asset protection, and children’s education. These challenges are precisely the problems that family trusts can effectively solve.

So, under the high threshold restrictions, which families can really benefit from family trusts? The answer does not simply depend on the size of the assets, but more importantly, the specific needs and risk tolerance of the family. The following types of families especially need to carefully consider family trust planning:

• Families with minor children:Minors lack judgment and financial management skills, and their property is easily susceptible to loss or improper use. Family trusts can effectively protect the property rights of minor children and avoid the loss of property due to accidents or other factors. As the trustee, the trust institution will properly manage and utilize the assets of the minor children according to the instructions of the trust document until they reach adulthood and have the ability to independently manage property.
• Families with a family member with a disability:People with disabilities often require long-term and continuous financial support, and their property is more vulnerable to encroachment. Family trusts can ensure the long-term living security of disabled people and prevent their property from being illegally occupied or squandered by others. The trust can designate a trustee to pay living expenses to the beneficiary on a regular basis and to provide necessary medical and nursing services according to their needs.
• Families owning family businesses:The inheritance of family businesses is the focus of many families, and disputes within the family are often a major obstacle to business development. Family trusts can effectively pass on family businesses to the next generation through professional management and planning, and avoid damage to business operations caused by inheritance disputes. The trust mechanism can clearly define equity distribution, standardize corporate management, and ensure the stable development of the enterprise.
• Families with cross-border asset allocation needs:Even if the total asset value does not reach tens of millions, if family assets are scattered in different countries or regions, they may still face complex tax planning and asset management issues. Family trusts can provide professional cross-border asset management services to help families avoid international tax risks and ensure asset safety and effective appreciation.
• Families worried about the property safety and livelihood security of the elderly:As the aging of the population becomes increasingly serious, the property security and life security of the elderly have become increasingly important social issues. Family trusts can help the elderly properly manage and use their assets to avoid property disputes or fraud. Trusts can arrange reasonable pension payment plans based on the needs of the elderly to ensure that their life in their later years is guaranteed.

All in all, although the current high threshold for family trusts limits its popularity, its value is not limited to high-net-worth individuals. For those families that value wealth inheritance, asset protection and family harmony, they should seriously consider the feasibility of family trust planning even if their assets are limited. The key is to seek professional wealth management advisors to assess your own needs and choose the family trust solution that best suits your circumstances. In the future, with product innovation and policy support, family trusts are expected to lower the threshold and benefit a wider range of families.

Lowering the threshold for family trusts: a three-pronged approach

At present, the threshold of a family trust of more than 10 million yuan has indeed hindered many families from enjoying the wealth protection and inheritance advantages it brings. Many people believe that family trusts are only suitable for ultra-high net worth individuals. This is a misconception. In fact, the value of a family trust does not only depend on the size of the assets, but also on the risk management and asset protection mechanisms it provides for the family. In order for more families, especially those with minor children, elderly parents or members with disabilities, to enjoy the benefits of family trusts, a multi-faceted strategy must be adopted to effectively lower the threshold and make this important wealth planning Popularization of tools. We can start from the following three aspects to gradually achieve the "three-pronged approach" goal:

1. Product innovation: tailor-made to meet diverse needs

Existing family trust products are mostly designed for high-asset customers and lack differentiated products for different asset sizes and needs. To lower the threshold, we first need toproduct innovation. This includes developing a range of more resilient and flexible trust products such as:

• Simple family trust:Lower the establishment threshold and management fees, simplify the process, and focus on solving specific needs, such as education fund management for minor children or living care expense arrangements for the elderly. This type of product can set a lower initial asset threshold, such as hundreds of thousands or even tens of thousands of yuan, to attract more ordinary families.
• Modular family trust:Provides a series of preset trust modules, and customers can choose different module combinations according to their own needs. For example, they can choose "Minor Children's Education Fund Management Module", "Elderly Life Care Module", etc. separately instead of All services must be purchased in one go.
• Online platform services:Establish an online platform to provide online consultation, document signing, asset management and other services to reduce labor costs, thereby reducing service fees and making family trust services more accessible to more people.

The design of these innovative products should focus on simplicity and ease of understanding, reducing complex legal terms and procedures so that ordinary families can easily understand and use them.

2. Policy support: reduce taxes and fees, lower entry barriers

Support from government policies is crucial to lowering the threshold for family trusts. At present, the establishment and management costs of family trusts are relatively high, which is also one of the important factors hindering its popularity. Therefore, the government can consider the following policy support:

• Tax benefits:For example, tax exemptions or preferential policies can be provided for specific types of family trusts to reduce their tax costs.
• Fee reduction:Encourage trust institutions to reduce establishment and management fees, and even provide fee exemptions or subsidies for low-asset families.
• Simplify regulations:Simplify the establishment and management process of family trusts, reduce cumbersome administrative procedures, and reduce processing costs and time costs.
• Provide professional training:Support and encourage financial institutions and professionals to receive family trust-related training, improve service levels, and provide more professional family trust services.

Through policy support, the overall cost of family trusts can be effectively reduced, making it more attractive.

3. Popularize education: enhance awareness and eliminate misunderstandings

Many people lack understanding of family trusts and mistakenly believe that it is an exclusive tool for the wealthy, which also hinders its popularity. therefore,universal educationCrucial. This requires:

• Strengthen publicity:Through various channels, such as media publicity, public welfare lectures, online education, etc., we can popularize the knowledge of family trusts to the public, eliminate misunderstandings, and increase awareness.
• Case sharing:Share successful cases to demonstrate the actual effects of family trusts in wealth inheritance, risk management and asset protection, so that more people can see its value.
• Professional consultation:Provide free or low-cost professional consulting services to help ordinary families understand their own wealth planning needs and choose a family trust plan that suits them.

Only by letting more people understand the value and role of family trusts can we truly lower their psychological threshold and make more families willing to accept and use this effective wealth planning tool.

Breaking through the threshold of family trust: benefiting more people

The current threshold for family trusts of up to 10 million yuan has indeed shut out many families who need wealth inheritance planning. This is not only a numerical limitation, but also means that many families miss the opportunity to effectively protect and appreciate their assets through professional planning. However, the value of a family trust is not limited to the size of the assets. It is also an important tool to protect the future of the family and realize the inheritance of wealth from generation to generation. It is an urgent task to break through the existing threshold and benefit more people.

How can we make family trusts no longer a "rich man's game" and truly benefit more families? We need to think from multiple perspectives and take proactive measures.

Diversified product design to meet different needs

Currently, there is a general lack of family trust products targeting different asset sizes and needs on the market. Most products target high-asset customers and ignore the actual needs of low- and middle-asset families. therefore,Develop a series of "simple" family trust products with lower thresholdsCrucial. These products can simplify the process, reduce management costs, and provide customized solutions for the special needs of different families, such as education funds for minor children and pensions for the elderly. For example, trust products can be designed with education funds or medical insurance as the core, and the threshold is set at hundreds of thousands or even lower, so that more families can afford it.

also,Flexible trust structure designAlso key. Different families have different wealth composition and inheritance needs, and the trust plan should also be flexible. For example, it allows for diversified allocation of trust assets, including real estate, stocks, bonds, etc., and can adjust the beneficiaries and trustees according to the actual situation of family members. and the duration of the trust. Only in this way can the individual needs of different families be truly met.

Government policy support reduces establishment costs

The support of government policies is crucial to lowering the threshold for family trusts. At present, in addition to management fees, the cost of establishing a family trust also includes attorney fees, notary fees and other related fees. The accumulation of these fees is also a considerable burden for low- and medium-asset families. therefore,The government can consider providing tax incentives, such as reducing stamp duty, inheritance tax, etc., to reduce the financial burden on families, thereby encouraging more families to use family trusts.

also,The government can also provide subsidies or subsidies, encourage financial institutions to develop and promote low-threshold family trust products, and strengthen training for relevant professionals to improve service quality and efficiency. Through these measures, the threshold for establishing a family trust can be effectively lowered, allowing more families to enjoy the protection brought by family trusts.

Active public education to raise awareness

Part of the reason many families shy away from family trusts is becauseLack of understanding of family trusts. They do not know the functions and advantages of family trusts, nor do they know how to choose a trust product that suits them. Therefore, it is crucial to strengthen publicity and education about family trusts. Through various channels, such as media promotions, online lectures, community activities, etc.Promote knowledge about family trusts to the publicOnly by letting more people understand the value and role of family trust can more people be willing to try and use it.

also,Improve the professional level of financial advisorsAlso crucial. Financial advisors need to master the relevant knowledge and skills of family trusts in order to provide professional consulting and planning services based on the specific circumstances of their clients. Through the assistance of professional financial advisors, we can help customers use family trusts more effectively to achieve the goals of wealth preservation and appreciation and inheritance from generation to generation.

All in all, breaking through the threshold of family trust and benefiting more people requires the joint efforts of the government, financial institutions and all sectors of society. Only through product innovation, policy support, public education and other efforts can family trusts truly benefit more families and protect the wealth inheritance of more families.

Breaking through the threshold of family trust: benefiting more people

strategic direction	Specific measures	expected effect
Diversified product design to meet different needs	Develop a series of "simple" family trust products with lower thresholds, simplify the process, reduce management costs, and provide customized solutions for different family needs (such as education funds, medical insurance).	Lower the threshold for trust establishment to make it affordable for more low- and middle-income families.
	Flexible trust structure design allows for diversified allocation of trust assets (including real estate, stocks, bonds, etc.), and can adjust the beneficiary, trustee and trust term according to the circumstances of family members.	Meet the personalized needs of different families and improve product applicability.
Government policy support reduces establishment costs	Provide tax incentives, such as reduced stamp duty, inheritance tax, etc.	Reduce family financial burdens and encourage more families to use family trusts.
	Provide subsidies or subsidies to encourage financial institutions to develop and promote low-threshold family trust products, and strengthen training for relevant professionals.	Reduce establishment costs and improve service quality and efficiency.
Active public education to raise awareness	Through media promotions, online lectures, community activities, etc., we will popularize relevant knowledge about family trusts to the public.	Improve public awareness and acceptance of family trusts.
	Improve the professional level of financial advisors so that they can provide professional consulting and planning services based on customer situations.	Assist clients to use family trusts more effectively to achieve the goals of wealth preservation and appreciation and inheritance from generation to generation.

Lowering the threshold for family trusts: benefiting more families

The high threshold for establishing a family trust has indeed prevented many families from enjoying the benefits it brings. The current threshold of tens of millions has limited this important wealth planning tool to a small number of high-net-worth families, while ignoring more families who need wealth protection and inheritance planning. Lowering the threshold and allowing more families to benefit is not only the key to improving the overall wealth management level of society, but also an important step in achieving social fairness and stability.

Many families, especially those with minor children, aging parents, or family members with special needs, are in desperate need of effective wealth protection and planning tools. However, the high threshold discourages them. These families may not have tens of millions in assets, but they also face financial risks in their children's education, parents' retirement, and the health of family members. A well-designed family trust, even if the asset size is relatively small, can effectively avoid these risks and ensure the well-being of family members.

Trust solutions tailored for different families

Lowering the threshold does not mean lowering service quality. Instead, it requires more refined product design and service models. We can consider developing different levels of family trust products to meet families with different asset sizes and needs. For example:

• Simple family trust:The threshold is lowered to hundreds of thousands or even lower, mainly for a single need, such as trust management of education funds for minor children or pension trusts for the elderly.
• Standard family trust:Covers more comprehensive asset management and wealth inheritance planning, suitable for families with a certain asset size.
• High-end family trust:Provide more complex asset allocation and tax planning services for high-net-worth families.

This graded product design allows families with different financial status to find a solution that suits them, effectively lowering the barrier to entry and allowing more families to enjoy the convenience of family trusts.

Popularize education and publicity on family trusts

Many families fail to use family trusts because of a lack of understanding of them. The high threshold is just an appearance. The deeper reason is that the public lacks understanding of family trusts and mistakenly believes that it is only applicable to the rich, while ignoring its actual value in risk management and wealth inheritance. Therefore, strengthening publicity and education is crucial.

Government departments, financial institutions and relevant professionals should actively participate in the campaign to popularize family trust knowledge. By holding lectures, publishing relevant materials, and online and offline publicity, we can popularize the relevant knowledge of family trusts to the public, let more people understand its functions and benefits, and eliminate misunderstandings. Only then can we truly lower the psychological threshold and make more families willing to Take the initiative to understand and use family trusts.

Government policy support and encouragement

Government policy support also plays a crucial role in lowering the threshold for family trusts. For example, you can consider introducing some preferential tax policies to reduce the establishment and operating costs of family trusts. In addition, the government can also encourage financial institutions to develop more convenient and lower-cost family trust products, and conduct certain supervision on them to ensure their compliance and enhance public confidence in family trusts.

More importantly, the government needs to create a more favorable policy environment to encourage the development and popularity of family trusts. This requires the coordinated cooperation and joint efforts of various relevant departments to truly realize the goal of family trusts benefiting more families, allowing more families to better plan their wealth, protect the well-being of family members, and make wealth inheritance smoother and safer.

Family trust threshold conclusion

In summary,Family trust thresholdThe level of it directly affects its popularity, and also determines how many families can enjoy the benefits of wealth protection and generational inheritance it brings. The current high threshold has indeed excluded many families, making family trusts a "rich man's game." However, we believe that throughproduct innovationDevelop simpler, lower-threshold family trust products, combined withGovernment policy support, such as tax incentives and simplified regulations, andactive public education, raising public awareness of family trusts can effectively reduce theFamily trust threshold, allowing this important wealth planning tool to benefit more families.

reduceFamily trust threshold, is not just a numerical adjustment, but also an important issue related to social equity and healthy inheritance of wealth. We call on all walks of life to work together so that more families can effectively protect and inherit their assets through professional wealth planning, laying a solid foundation for a better future. Only in this way can we makefamily trustReally play its due value and become the guardian of more families.

Family Trust Threshold Frequently Asked Questions Quick FAQ

Q1: Is the threshold for family trust really that high? Is it only available to high net worth individuals?

The answer is: not necessarily. Although the threshold for establishing many family trusts is currently very high, usually requiring an asset size of at least 10 million yuan, this does not mean that family trusts are only suitable for high-net-worth individuals. The value of a family trust is not only reflected in the size of the assets, but also in the wealth inheritance, risk management and asset protection functions it provides. Even if the asset scale is small, reasonable family trust planning can effectively solve problems such as property protection for minor children, asset protection for the disabled, and pension planning for the elderly. The key lies in how to find a family trust solution that suits your family's needs and asset size. Many financial institutions are now beginning to develop simpler, lower-threshold family trust products to meet the wealth planning needs of different families.

Q2: How to lower the threshold of family trust so that more people can use it?

The answer is: Lowering the threshold for family trust requires a multi-pronged approach, including product innovation, policy support and popular education. First, financial institutions can develop simpler and modular family trust products, such as exclusive trusts for education funds for minor children or pension funds for the elderly, to lower the initial asset threshold. Secondly, the government can provide tax incentives to reduce establishment costs, such as stamp duty and inheritance tax exemptions. Finally, we should strengthen the publicity and education on family trusts, let the public understand its value and functions, eliminate misunderstandings, and let more people realize this effective wealth planning tool.

Q3: How should I choose a family trust plan that is suitable for my family?

The answer is: Choosing a family trust solution that suits your family requires professional evaluation and consultation. You need to consider your family's asset size, financial needs, special circumstances of family members (such as minor children, disabled people or the elderly), as well as succession planning for the family business, etc. Be sure to seek experienced wealth management consultants to help you assess your own needs and tailor a family trust plan to ensure the effectiveness and appropriateness of the plan. Don't make a hasty decision based on a single piece of information. Fully understanding your own needs is the first priority. Professional financial advisors can provide consultation and planning based on your situation, allowing you to choose the most suitable family trust solution.