The Difference between Private Trust and Private Foundation

People all over the world are living longer, healthier lives, which results in the accumulation of wealth as well. The important question that many of us have on our minds as we get older – “Are we well prepared to protect our wealth and family once our lives come to an end?” 

The fundamental objective of Succession Planning is for you to ensure that your wealth is passed on to your loved ones, so that they would be able to face the hardships caused by your absence. Good succession Planning allows you to take control over your own assets instead of leaving it up to the legislature and courts to decide on your behalf and gives you the option to entrust the distribution of your assets to the person you trust the most to look out for you and your loved ones’ best interests.

The primary concern for most of us is deciding what would be the best way to keep our loved ones safe and protected should we become incapacitated or even worse, meet our untimely demise. This includes making choices like appointing a surrogate to make medical decisions for you, or management decisions of your property and business, as well as providing support for your family, thereby alleviating the stress on your loved ones.

Upon your passing, the immediate goal would be to wrap up your final affairs. Providing support for the distribution of assets to your next of kin by avoiding unnecessary probate expenses, minimizing the costs of estate taxes, and properly safeguarding the transference of your inheritance, and not to forget the continuous management of your wealth and business are just some of the factors to be considered.

As you go through the succession planning process, you would be considering between having a Will, Private Trust or a Private Foundation would be best suited for you and your wealth. Once you have decided, how do you ensure that your vision will continue to be served long after you have passed? The question “when would be the best time to set up a succession plan” have been pondered by many and for some, the discussion of death and succession is a taboo topic and is usually avoided until their very last moments of life. Even without the dreadful events enveloping the world today, the best answer for succession planning that we can give you comes from a popular Chinese proverb: The best time to plant a tree was many years ago, the second-best time is now. These are important questions, and finding the answers starts with gaining a better understanding. The following comparison will serve as a simple guideline for your succession planning.