Trust foundation
A trust foundation is a non-incorporated foundation , which is also referred to as an dependent, fiduciary foundation or (if managed by a foundation as a trustee) as a sub-foundation and established by a contract between the founder and the trustee (carrier) or by disposition upon death becomes. The founder transfers the foundation's assets to the trustee, who manages them separately from his own assets.
The purpose of the foundation and the other basic stipulations are laid down in statutes , which are part of the contract with the trustee. The foundation often has its own committee that decides on the use of the foundation's funds. Externally, the trustee acts for the foundation, which does not have its own legal personality. The unincorporated foundation is not expressly regulated in the German Civil Code . General civil law applies to them, i.e. above all the law of donation (for the transfer of assets) and the right to order (for the fiduciary relationship ), but primarily the special agreements in the contract between the founder and the trustee.
Trustees, as service providers for the trust foundation , usually come from the following areas: associations , foundations with legal capacity , parishes , universities , foundation administrations (communal, ecclesiastical as well as savings banks and banks).
The following result from the nature of the trust foundation
Advantages:
- The foundation's assets are not subject to any state-determined minimum amount. A trust foundation could be set up with a low five-digit amount.
- The trust foundation is a very flexible form of foundation. No approval process is required to set up a trust foundation. The requirements for incorporation are very simple.
- A control is only carried out by the tax office. At the same time, all tax law privileges of a foundation apply and an application can be made to the competent tax authority for recognition of the charitable status.
- The trustee can take over part or all of the administration and it is therefore not necessary to create a separate administration structure (e.g. board of directors). By using the trustee's organizational structure, administrative costs can be kept low.
- It only takes a few weeks to set up a trust foundation. (It will take several months to establish a foundation with legal capacity.)
- Under certain circumstances, the purpose of the foundation can be changed very easily in accordance with the provisions in the statutes or the foundation can even be dissolved without the approval of a controlling body or an authority being required.
- As an independent corporation tax subject (Section 1 (1) No. 5 KStG), non-profit law is also applicable to trust foundations.
Disadvantage:
- The trust foundation is not subject to any state supervision of foundations .
- Since the trust foundation has no legal personality, it cannot itself be the bearer of rights and obligations.
- There is a high dependency on the trustee (risk of bankruptcy)