What Is a Trust Fund?
A trust fund is a modern legal instrument for the protection, management, and strategic planning of assets. It allows assets to be separated from the founder’s estate and entrusted to a trustee — in accordance with the rules determined by the founder.
The fund does not have separate legal personality, yet it operates as an independent asset structure. It may be established during the founder’s lifetime or by will. The statutory regulation is set out in Sections 1448–1474 of the Czech Civil Code.
A trust fund may be established either as a private trust fund (for the benefit of specific beneficiaries, such as family members) or as a public-benefit trust fund (to pursue a purpose of public benefit, such as funding scholarships).
Key Roles within the Fund
- Founder — contributes the assets and determines the rules.
- Trustee — administers the assets of the fund.
- Beneficiary — the person for whose benefit the fund is established.
- Protector — supervises the trustee’s activities and safeguards the interests of the beneficiaries.
Who Is a Trust Fund Suitable For?
A trust fund can be used in a wide range of personal and business situations:
Families
- Protection of family wealth, planning for intergenerational transfer, and provision for descendants under pre-defined rules.
Entrepreneurs
- Protection of a business against risks, separation of personal and business assets, and strategic ownership structuring.
Investors
- Holding investment assets, securities, and equity interests in companies through a stable structure.
Philanthropists
- Establishment of a public-benefit fund to support education, culture, or charitable causes — without the need to establish a foundation.
Advantages of a Trust Fund
A trust fund offers a unique combination of protection, flexibility, and discretion.
| Advantage | Description |
|---|---|
| Asset protection | Assets transferred to the fund are protected against the founder’s creditors, enforcement proceedings, divorce, and unwanted interference by third parties. |
| Discretion | A trust fund is not a legal entity and its structure is not subject to public registration to the same extent as business corporations. |
| Flexible administration | The founder defines the rules for the administration and use of the assets. The terms can be tailored precisely to specific needs. |
| Intergenerational continuity | It enables smooth and controlled transfer of assets within a family across generations without the risk of fragmentation. |
| Tax efficiency | With the proper structuring of the fund, a more efficient tax position can be achieved while maintaining full compliance with applicable legislation. |
| Founder control | Even after transferring the assets into the fund, the founder retains significant influence through the fund statute and the role of the protector. |
Our Trust Fund Services
From the initial consultation to ongoing administration — we take care of the entire process.
Turnkey Establishment of a Trust Fund
- We prepare the complete establishment documentation, including the trust fund statute, arrange the notarial deed, and register the fund in the Register of Trust Funds.
- Preparation and drafting of the fund statute tailored to the client’s individual needs
- Founding legal act in the form of a notarial deed
- Registration of the fund in the Register of Trust Funds
- Structuring of governance and asset protection arrangements
Structuring of Roles and Governance
- We assist with the selection of the trustee, beneficiaries, and protector. We define their mutual rights and obligations so as to minimise legal risks associated with overlapping roles.
Administration of Fund Assets
- We provide ongoing legal advice in relation to the day-to-day administration of assets — from the acquisition of real estate and equity interests to the incorporation of companies controlled by the fund.
- Assistance with the acquisition of assets into the fund (purchase, inheritance, acquisitive prescription)
- Establishment of companies controlled by the fund
- Legal advice in relation to day-to-day administration
Taxes, Accounting, and Bank Account
- We ensure proper structuring of the fund’s tax obligations as a corporate income tax payer, advise on accounting matters, and assist with opening a bank account in the Czech Republic and abroad.
Register of Beneficial Owners
- We advise on the registration of beneficial owners in accordance with Act No. 37/2021 Coll. and ensure compliance with all statutory obligations.
Model Situations
Typical scenarios in which a trust fund provides real value.
Protection of Family Wealth — Gradual Transfer to Descendants
The owner of substantial assets wishes to ensure that their children gain access to the assets gradually — depending on their age and fulfilment of specific conditions, such as completion of education.
Solution: A trust fund with rules for conditional distributions to beneficiaries.
Protection of Equity Interests in Companies
An entrepreneur holds a majority interest in a company and wants to avoid the risk of it being sold off after their death or in the event of family disputes.
Solution: Transfer of the equity interest into the fund with clearly defined rules for administration and allocation of income.
Advantages of a Trust Fund for Entrepreneurs
Protection Against Business Risks
- By transferring key assets into the fund, those assets can be protected against future business risks.
Long-Term Continuity
- The fund’s assets can be administered independently of changes within the company — including the departure of shareholders or generational succession.
Retention of Control
- The founder may set governance rules in such a way as to retain significant influence over the assets.
Discretion
- The fund is not a legal entity and its structure is not publicly available to the same extent as commercial registers.
Strategic Planning of Business Ownership
- A trust fund may hold equity interests in companies, securities, or other business assets.
Why Choose Our Services?
Specialised Team with Extensive Experience
- We have long specialised in trust funds. We prepare not only the establishment documents, but also a comprehensive asset management strategy.
Nationwide Reach in the Czech Republic and International Experience
- We represent clients throughout the Czech Republic as well as in cross-border structures.
Comprehensive Legal Support
- We ensure that fund administration is integrated with corporate, tax, family, and real estate aspects.
Individual and Discreet Approach
- Each fund is tailored to the founder’s specific objectives and needs.
Would You Like to Protect Your Assets Effectively?
Contact us to find out how a trust fund can help you.