Posted by Editor's note:In the Chinese community, there is a widely spread financial slogan: "The rich died of trust, the middle class died of financial management". Is this sentence a prejudice or a painful experience? What kind of story is behind it? LifeTank©️ invited industry columnists Ben, And share his insights and opinions with us in a question-and-answer manner.
Q1. What the hell is a trust?
In China, the trust we hear is more like a trading product, used for investment and financial management.
In the United States, in addition to the trust investment service market, there are also extremely completePersonal and family trust business market.Due to different social systems and development directions, Chinese society has no real personal and family trusts for wealth inheritance. Therefore, everyone lacks an understanding of this area.After coming to the United States, new immigrants will mistakenly think that "this trust" is "that trust" according to the logic of the past.
Q2. What is a trust in the United States?
A trust, a commodity service, is divided intoTrust market at the individual and family level,with Trust market at the trust investment company level.
Simply put, the former is one is to write a good document according to your own ideas and entrust how to deal with assets, and you can also hire a team to operate.This trustWhat you manage is your own assets (money, real estate, investment products, etc.) and does not require SEC registration.In reality, in order to facilitate understanding, I liken it to "High-end Will Operation Company. "
The latter is an investment service trust company that provides raised funds to the public.It is the investor's money that needs to be registered with the SEC and the US Securities Regulatory Commission (some states allow the management of funds under $1 million to register in the state).For example, the REITs or some funds we often buy are investable financial instruments issued by investment service trust companies.The brokerage firm I use for my personal pension account, Fidelity, is also a trust company.
Therefore, if I go out tomorrow, I can brag about it. My personal pension is handed over to the trust company to take care of it. Does this sound like "tall" at once.
Q3. Why do you say "the rich died of trust"?
To understand the above-mentioned differences in the understanding of trusts between China and the United States, let's take a look at the phrase "the rich die from trusts".
In China, it actually refers to the wealth management products issued by some wealthy people who entrust their money to a financial institution or manager, hoping to make a return on investment, but the PPT blessed by the word "trust" is so beautiful. Up,Finally died on the wealth management products wrapped in these beautiful coats, Such as the Pan-Asian Trust back then.
In the United States, the "rich man died of trust" slogan refers to the establishment of improper personal and family trusts at an improper time, or the situation where the trust is not a person, not only did not achieve the purpose of establishing a trust for wealth inheritance, but insteadSimple problems complicate, Resulting in more disputes and lawsuits involving family members or descendants.According to LegalMatch’s data, personal and family trusts are involved,The second most common lawsuit is the lawsuit between the beneficiary and the trust manager (executor).
Therefore, the statement that "the rich died in the trust" does not accuse the trust as a product or service.Whether in China or the United States, this statement is purely entertainment, and the responsibility that should be assumed by "people" has become a product and service pot of "trust."
We really need to be careful,It is "misleading" and "scam" carried out in the name of trust by using information asymmetry and poor perception.
Q3. Should new immigrant families be a trust?
It depends on each situation.
It sounds nonsense, but as we said earlier, the situation of new immigrant families and Chinese community families is different for each family.But the common point is that the trusts of this kind encountered in the United States are, to put it bluntly, one "High-end Will Operation Company"Compared with setting up a will, it has its own unique advantages.
This is a private company that specializes in its own affairs, and is responsible for implementing the respective rules that we drafted during our lifetime.This company cannot be opened, why and when? As a company founder, you need to make decisions and judgments based on the actual situation of your family.
If you need to solve the custody of minor children, a will can achieve this function.
If you love to buy a house and have bought a house in your own name in many states, then when you consider passing on the property to future generations, you need to seriously consider the "high-end will".
If you are in the Top 1% of the United States and have assets of more than XNUMX million yuan, in addition to having a private professional team to take care of your property, you may have more comprehensive needs.
If you want to understand the needs of your family, you don’t need a trust. You can actually start by setting up a will for yourself, and understand the contents of the will and the trust step by step. This is a step-by-step familiarization process.
LifeTank©️Community-recommended Will Establishment Toolfree will, Sponsored by hundreds of non-profit organizations across the United States,The profit model determines that professional services can also be used for free. FreeWill can help each of us set up a professional will and evaluate whether a trust is needed.
LifeTank©️ community volunteers have contacted FreeWill to cooperate with localization to provide the Chinese community with the Chinese version of self-service wills and trust tools.
If your asset size and family situation are too complicated and you find that ordinary wills and trust establishment rules can no longer meet your needs, you can also seek the help of LifeTank©️ community professional trust lawyers and state bar associations.
Q4. The author himself, have you made a trust?
No, but will do.My family situation is not at the moment when a trust is necessary.
In addition, the political and legal system and capital interests of American society are highly bound, forming a business society with a stable bottom and a "dynamic" appearance.This is in stark contrast to the "static" solid deep structure of Chinese society.Looking back at the past few years in the United States, the day and night have changed, and the system and regulations have changed faster than the sky. It is not worth my personal efforts to pursue such changes prematurely.
2025-2026 is a threshold that needs to be reassessed afterwards.Re-evaluate every 1 to 3 years.
In addition, this is just my personal situation and sharing, and may not be suitable for you.
Q5. What is the relationship between trust and life insurance?
Trust and life insurance are two commodity services in different fields.There is no necessary connection between the two.
The two can be matched at any time according to our wishes, which can play a better role in the overall wealth planning and estate planning of ultra-high net worth individuals.
Article summary
Regarding trust, as a member of the new immigrants, I combined the study notes of SEC registered securities representatives and international financial planners, and pointed out from the perspective of personal work practice and experience "The rich died of trust, the middle class died of financial management"The origin of the prejudice component in this sentence, and shared personal opinions, hoping to simplify the topic of "trust" so that readers can see clearly.
But the reality is still that no matter what our words are, we still can’t hold back everyone’s yearning for something that sounds “good”, but without a basic and comprehensive understanding, then it’s possible to “fall into the pit” without Up.
I think of a trust lawyer who has a good reputation in the field of trust, who complained about training meetings in the industry-in many cases, her main job is to dissuade 90% of all kinds of clients who have listened to Marketing content and come to the door:Wait, is trust really suitable for you?(End of the article)
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