Shenyu Consulting - Family Wealth Succession

Wealth Succession Overview

Family wealth succession refers to the safe and effective transfer of personal or family wealth to the next generation or designated beneficiaries through legal financial tools and legal means. Under the 2026 legal framework, insurance trust and family trust have become the choice of more and more high-net-worth families. They can not only realize the orderly succession of wealth, but also have multiple functions such as debt isolation and tax planning.

Different from simple trust products, insurance trust and family trust are specialized tools established within the legal framework, with stronger legal effect and more comprehensive planning functions. They can help you realize the long-term planning of wealth, ensure the safe succession of family wealth, and provide comprehensive protection for your family.

Insurance Trust

Insurance Trust Rules

Insurance trust refers to the policyholder transferring the beneficiary right of the insurance contract to a trust company, which manages and distributes the insurance proceeds in accordance with the provisions of the trust contract.
To establish an insurance trust, the policyholder needs to sign a trust contract with the trust company and transfer the beneficiary right of the insurance contract to the trust company.
The trust property of insurance trust is insurance proceeds, including death insurance proceeds, maturity insurance proceeds, survival insurance proceeds, etc.
The beneficiaries of insurance trust can be the policyholder's spouse, children, parents, etc., or charitable organizations.
The trust period of insurance trust can be determined according to the provisions of the trust contract, usually long-term or lifetime.

Insurance Trust Modes

1.0 Mode

Insurance trust 1.0 mode refers to the policyholder first purchasing insurance, and then transferring the beneficiary right of the insurance contract to the trust company. In this mode, the policyholder of the insurance contract is still the original policyholder, and the insured person remains unchanged, only the beneficiary is changed to the trust company. When an insurance accident occurs or the insurance matures, the insurance company pays the insurance proceeds to the trust company, and the trust company then manages and distributes the insurance proceeds in accordance with the provisions of the trust contract.

2.0 Mode

Insurance trust 2.0 mode refers to the trust company as the policyholder, purchasing insurance for the insured person, and at the same time the trust company is also the beneficiary of the insurance contract. In this mode, the trust company is both the policyholder and the beneficiary, and the insured person is usually a family member designated by the settlor. When an insurance accident occurs or the insurance matures, the insurance company pays the insurance proceeds to the trust company, and the trust company then manages and distributes the insurance proceeds in accordance with the provisions of the trust contract.

Insurance Trust Features

Debt Isolation: The trust property of insurance trust is independent of the debts of the settlor and beneficiaries, with strong debt isolation function.
Tax Planning: Insurance trust can achieve the purpose of tax planning through reasonable structure design.
Flexible Distribution: Insurance trust can flexibly distribute insurance proceeds according to the provisions of the trust contract to meet the different needs of beneficiaries.
Lower Threshold: The starting point of insurance trust is usually lower, generally starting from 1 million yuan, suitable for more families.
Simple Operation: The establishment and management of insurance trust are relatively simple, without complex legal procedures.

Trust Types and Case Analysis

Trust Types

Revocable Trust

Revocable trust refers to a type of trust that the settlor can modify or revoke at any time after establishing the trust. In a revocable trust, the settlor retains control over the trust property and can adjust trust terms, change beneficiaries, or terminate the trust according to their own wishes.

Features: High flexibility, but relatively weak debt isolation effect, because the settlor still retains control over the trust property.

Irrevocable Trust

Irrevocable trust refers to a type of trust that the settlor cannot modify or revoke at will after establishing the trust. In an irrevocable trust, the settlor transfers control of the trust property to the trust company and no longer has direct control over the trust property.

Features: Strong debt isolation effect, but relatively low flexibility. Once established, it is difficult to modify or revoke.

Celebrity Trust Piercing Case Analysis

In past public cases, some trusts established by celebrities were ruled invalid by the court or executed by creditors, mainly due to:

Inappropriate Establishment Time: Establishing a trust only when facing debt crisis or litigation risk, which is recognized by the court as maliciously evading debt.
Retaining Too Much Control: The settlor still retains actual control over the trust property after establishing the trust, which is recognized by the court as the trust property not being truly transferred.
Illegal Trust Purpose: The purpose of establishing the trust is to evade debt or avoid legal obligations, which is recognized by the court as invalid trust.
Not Established in Accordance with Legal Procedures: The establishment of the trust does not comply with the provisions of the "Trust Law of the People's Republic of China" and other relevant laws and regulations, which is recognized by the court as invalid trust.

These cases remind us that establishing a trust must follow laws and regulations, and plan reasonably to truly achieve the purpose of wealth succession and debt isolation.

Family Trust

Family Trust Rules

Family trust refers to the settlor entrusting his property to a trust company, which manages and disposes of it for the benefit of the beneficiaries in accordance with the provisions of the trust contract.
The trust property of family trust can be cash, equity, real estate, artworks and other forms of property.
The beneficiaries of family trust are usually family members of the settlor, such as spouse, children, parents, etc.
The trust period of family trust is usually long, which can be several decades or even hundreds of years, realizing the cross-generational succession of wealth.
The establishment of family trust needs to comply with the provisions of the "Trust Law of the People's Republic of China" and other relevant laws and regulations.

Family Trust Features

Debt Isolation: The trust property of family trust is independent of the debts of the settlor and beneficiaries, with stronger debt isolation function.
Tax Planning: Family trust can achieve the purpose of tax planning through reasonable structure design.
Wealth Succession: Family trust can realize the cross-generational succession of wealth, ensuring the long-term preservation and appreciation of family wealth.
Higher Threshold: The starting point of family trust is usually higher, generally starting from 10 million yuan, suitable for high-net-worth families.
Strong Customization: Family trust can be customized according to the needs of the settlor to meet the specific needs of different families.

Insurance Trust vs Family Trust

Comparison Item	Insurance Trust	Family Trust
Trust Property	Insurance proceeds	Cash, equity, real estate, artworks and other forms of property
Establishment Threshold	Generally starting from 1 million yuan	Generally starting from 10 million yuan
Establishment Procedure	Relatively simple	Relatively complex, requiring professional lawyer participation
Debt Isolation	Strong	Very strong
Tax Planning	Has certain advantages	More obvious advantages
Flexibility	Relatively limited	Highly flexible, can be customized

Family Wealth Succession