Family foundation is a solution that can be used by managers and politicians to protect their assets from economic risk. The Sejm has already passed the Act and it will enter into force on the 22nd of May 2023. In this article, you will learn why a family foundation can be an interesting solution for people who want to secure their assets.
Table of Contents
- Family foundation – a way to protect your assets
- Protecting the assets of managers and entrepreneurs in a family foundation
- What can you contribute to a family foundation?
- The rights of the founder and of the beneficiary
- The foundation’s liability for the founder’s obligations
- Summary
Family foundation – a way to protect your assets
The aim of a family foundation is to protect one’s assets from risks connected with business activities. Its main objective is to secure your life accomplishments. Forming a family foundation may be an attractive alternative to traditional models of property protection. These usually involve the transfer of assets to relatives.
Protecting the assets of managers and entrepreneurs in a family foundation
Polish family foundation is a solution dedicated not only to owners of large enterprises but also to managers and individuals running sole proprietorships. The foundation is an alternative to transferring assets to close relatives, including spouses.
What can you contribute to a family foundation?
The contribution of the founder (e.g. board member of an LLC) may include a house, a second apartment, recreational land, or other assets. Their minimum value should amount to 100 000 PLN. In return, the founder will not receive a share that could be taken over by a bailiff or a receiver.
The rights of the founder and of the beneficiary
In a family foundation, the rights and obligations of the founder are inalienable. The founder’s rights are not subject to seizure. Therefore, they cannot be included in the founder’s bankruptcy estate. The foundation’s manager may be at the same time a founder, a beneficiary (i.e. the one who benefits from its resources) or a board member.
The foundation’s liability for the founder’s obligations
Forming a foundation and contributing assets to it is not a way to escape existing obligations towards contractors. The family foundation will be jointly liable with the founder for his liabilities and tax arrears that arose before its creation. Yet, the liability will be limited to the value of assets contributed to the foundation. The foundation will not be liable for his liabilities incurred after its formation.
Summary
A family foundation can be an attractive alternative for people who want to protect their assets from business risks. They will be valuable for those who want to provide a long-term support for their families. Nonetheless, it’s crucial to implement relevant control and supervisory mechanisms to prevent possible abuses.
Are you wondering if a family foundation is a good solution for you? Do you want to know more about it? Read our article “Family Foundation in Poland. For whom is a Polish family foundation a good solution?”
