Cases of marital or partnership property

Fiduciary asset management represents one of the ideal legal institutions in the event you wish to ensure that your assets are safe and also rest assured about their taxation – in certain cases, fiduciary asset management may offer fairly favourable tax conditions.

Highly popular in English-speaking countries for long years, the institution of “trust”, i.e. fiduciary asset management was made available by Hungarian law to clients in 2014. Although a growing number of people understand the concept of fiduciary asset management and benefit from the possibilities provided by fiduciary asset management, a lot of topics or issues still arise on our clients’ part, which indicate that they have little information on the subject.

Borrowed from the law of English-speaking countries and available since 2014 in Hungary, fiduciary asset management has centuries-old traditions. The idea is to provide an option for the settlor to think through the future of his/her assets consciously, in detail, focusing on their long term future – whether such assets be an undertaking owned by the family for multiple generations, or a holiday cottage, a business share in a particularly prosperous enterprise, or any other moveable or immoveable property or right. (In Hungary, agricultural lands are an exclusive exception from fiduciary asset management.)

Of the many benefits of fiduciary asset management, one of the most important ones is the ability to protect certain assets effectively and over a long period from potential external dangers – such as third persons or business risks.

Assignment of a fiduciary asset management company may be necessary in a number of cases. Such a step may be taken when the goal is to avoid cumbersome succession rules or the concomitant, often complicated probate procedures – with special regard to cases where the inheritance is an asset (such as a majority business share or equity stake) where even months spent with a probate procedure may result in serious losses in pecuniary or other values, or where the liquidation of a business owned is being considered, or prior to an upcoming marriage.

The fate of assets accumulated by previous generations may sometimes pose a great challenge to the heirs. Liquidating or cutting up certain assets – such as particularly valuable real estate owned by the family for generations, an internationally acclaimed brand name or a smoothly running profitable business – is impossible for practical or conceptual considerations, whereas, in other cases, such a step would result in severe depreciation or market disadvantage, or, in yet other cases, expertise needed for managing the asset, for instance, a business operating in a special area, would be missing. A similarly frequent case is that, although all professional arguments support cutting up the asset, the heirs would not allow to do so for a sentimental reason.

The rights related to inheritance are particularly complex and often strict – in disputed or complicated cases, for example, probate proceedings may take as much as years to complete, a dispute may arise among heirs, or the property accumulated by the testator over many years may even fall into unworthy hands.

Parties to be married often refrain from concluding a nuptial agreement – feeling that such a legal act drawn up with a clear head expresses a lack of trust towards their future spouse and the success of their marriage. In many cases, however, a situation that makes the settlement of assets indispensable may evolve in a matter of a few years – fiduciary asset management may represent an ideal solution also in such cases.