Transactions related to preserving assets
There are countless personal, family or business situations in life where the owner of properties intends to separate their assets, temporarily or even in the long term, from their own, their family members’ or heirs’ scope of control, thus hiding a given asset from unauthorised eyes. Fiduciary asset management can provide flexible responses also in such situations, with maximum discretion.
If you deposit your money in a bank, banking secrecy will protect your account balance from unauthorised inquirers – whereas there are few tools that provide similarly effective means in an adequate legal framework to protect immoveable and corporate property. When establishing the legal institution of fiduciary asset management, the legislator offered a solution also to this problem: it enables separate management of an asset, undertaking, high-value real estate or even the entire estate, whereby they may be protected from inquisitive peeks of the outside world, future creditors – and even, in justified cases, from direct descendants or ascendants. In the fiduciary asset management contract, the settlor waives all rights of disposal of accurately specified assets, rights and receivables, whereby the asset manager nominally becomes the owner of the managed assets. Such cases result in a legal situation where neither the settlor nor the asset manager or the creditors, spouses, family members of the beneficiaries can access the assets; moreover, the assets transferred into asset management cannot be subject to insolvency procedures, and may not be subject to practically any legal or financial retribution. The legal institution of fiduciary asset management (such as the extraordinary insurance required by law) and the contract concluded upon the establishment of the legal relationship provide sufficient guarantees that the asset manager cannot misuse the assets entrusted to them.
Fiduciary asset management – as indicated by its name specified in the relevant provision of law – denotes an economic and legal activity that relies on discretion and unconditional trust between the parties. Considering that the settlor nominally transfers ownership of their assets to the asset manager, our undertaking always applies maximum tact, outstanding expertise and full acknowledgement of responsibility on finding the asset management solution that best suits the client’s criteria in such transactions.
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Fiduciary asset management and taxation
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.
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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.
See moreWhat is fiduciary asset management?
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.)
See moreAsset protection
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.
See moreWhat can be included in a fiduciary asset management contract?
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.
See moreMatters of family property
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.
See moreFiduciary asset management as an alternative to wills
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.
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