Although as a parent you try to raise your child as best you can, it is still difficult to estimate how a child will cope with receiving a large sum of money. When a child makes the wrong choices, it can mean regret later. For example, because as a result an education was not completed or the wrong 'friends' were made.
Adult
As long as children are minors, their assets are managed by their parents and, if they are not, by the guardian. If these are good at it, nothing needs to be arranged until the children are 18. Once a child turns 18 and thus comes of age, the child is allowed to manage their own assets. Now, one 18-year-old is not the other, but it is often considered undesirable for such a young adult to suddenly have free disposal of a tonne, a million or perhaps more.
Cantonal court
Parents and guardians must give an account of their management of assets to the subdistrict court. Permission must also be requested from the subdistrict court for many actions. If a gift or testamentary trust is used, it can be stipulated that no permission from the subdistrict court is needed. Through such a guardianship, it can also be arranged that it is precisely not the parent or guardian who gets the guardianship.
Limiting control
To prevent a child from running away with his assets, it is possible to limit the child's control. For example, by putting the assets under guardianship or by certifying or bringing assets into a private limited company or other legal entity. In this way, you can arrange that someone already up to a certain age will not be able to dispose of the assets himself or forever. But you can also arrange that as someone gets older someone will have more of their own say.
A guardianship is set up when a gift is made or determined with regard to your inheritance in a will. Through guardianship, the child becomes the owner, but his/her assets are managed by an administrator. The guardianship provisions can then regulate what the rights and duties of the guardian are. For example, whether he can dispose of the assets without the child's or the cantonal court's permission.
Certification of assets
Certification separates the control over assets and the economic interest in them. Certification is common for shares. A foundation is often set up to which the shares are transferred. The foundation thus has control over the shares. This foundation then issues depositary receipts representing the economic interest.
Within the foundation, the board has control and can very nicely and subtly regulate who can appoint and dismiss directors.
In many cases, a certification can be set up in a tax-neutral way.
By contributing assets to a BV or NV, there is no longer direct control over the assets. Shares or other rights to which control rights may or may not be attached then replace the assets. Such a transfer also causes the assets to be taxed differently. This is pleasant in some circumstances, but should be considered on a case-by-case basis,
For more information on steering control, please get in touch. We will be happy to help.
pkooijman@kooijmanautar.nl
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