掩盖非法财产来源 “伪家族信托”将会被“击穿”或否定信托效力

Core Viewpoint - The recent focus on "family trusts" has been heightened by legal cases in China, particularly the upcoming hearing of the Zong Qinghou inheritance dispute involving a $2.1 billion offshore family trust, raising concerns about the potential for family trusts to be "pierced" or "fail" [1][2]. Group 1: Legal Cases and Implications - Recent cases in China have seen family trust assets subjected to forced execution, leading to industry speculation about the vulnerability of family trusts [2][3]. - The South Tong court's ruling involved a family trust of 41.43 million yuan being classified as "deposits" and subject to seizure due to the criminal background of the trust's creator [2][3]. - Legal experts emphasize that family trusts must be established with legitimate funds and purposes; otherwise, they risk being invalidated [4][5]. Group 2: Trust Structure and Legitimacy - Experts assert that a legitimate family trust will not be "pierced" or "fail," but issues arise when the trust's assets are mixed with illegal funds, leading to potential invalidation [5][6]. - The concept of "pseudo-family trusts" is highlighted, where trusts lose their legal standing due to illegitimate purposes or sources of funds [4][5]. - The legal framework in offshore jurisdictions is often more developed, providing clearer guidelines and judicial precedents for trust validity [6][7]. Group 3: Development and Management of Family Trusts - The choice between establishing an offshore or domestic family trust is based on individual circumstances, with no clear superiority of one over the other [6][7]. - Family trusts are increasingly popular among high-net-worth families for wealth transfer, risk isolation, and tax planning [6][7]. - The regulatory environment in China requires a minimum threshold of 10 million yuan for family trust establishment, typically catering to business owners or high-net-worth individuals [7][8].