Legal protection of property

Ensuring that property remains secure is of key importance to investors, so understanding the possibilities of its protection is essential to conducting good business. Therefore, it is important to analyze threats and to consider the reasons for such protection. When assessing the threats to property security there are several key question to be considered:

  • The level of legal protection of property in the Czech Republic.
  • The tax burden associated with the ownership of any property
  • Options for the division of inheritance claims.
  • The fear of uncovering personal property structure (Does one want to be seen as the owner).
  • The holding of assets in a consistent form for the next generation.

What about the use of a trust or foundation to protect ones assets? There are yet other issues to consider:

  1. The preservation of the hidden identity of the founder.
  2. Protecting assets against the claims of creditors which are against the settlers.
  3. With a trust, there is the possibility of changing the ratios between the heirs regardless of the probate proceedings.
  4. Waives the tax requirement in the case of some incomes.

The Institute of trust has a centuries-old tradition in the world born out of English law. Trust itself has no legal personality, it is a legal relationship between the founder (owner of the property) and the trustee. The trustee is usually a legal entity established by legal provisions governing the issue of the Trust. After the establishment of the Trust and the transfer of assets into the Trust, the Trust is the sole owner of the trust assets and therefore these assets cannot be used to meet the obligations of the founder.

The basic document of trust is called Letter of Wishes. This document defines exactly how the property should be treated and who should have the benefit of any such property. The person (or more people) is called Beneficiary. Income from the trust may have the character as financial performance and fulfillment in kind. The founder may also appoint a protector, whose role is to check whether the activities of the trustee shall proceed in accordance with the wishes of the founder.