Duma approves creation of heritage foundations

State Duma approves the creation of hereditary funds

20.07.2017

Deputies adopted the bill on the third reading, allowing entrepreneurs not only to transfer their property, but also to conduct charitable activities on behalf of a foundation.

The decision to establish a hereditary foundation or trust is taken by the individual when drafting their will. In the documents, the statutes and the conditions of fund management, the size, methods and terms of the constitution of the fund’s assets are described in detail. Moreover, in official documentation, there should be information regarding the individuals appointed to the management of the organisation, RIA Novosti reports.

As the author of the bill, Chairman of the State Duma Legislative Committee, Pavel Krasheninnikov, explained, after the death of a person, a notary should send a declaration to the authorised government agency regarding the state registration of the hereditary fund and attach to the declaration the testator’s decision to establish the fund.Â

“The management of the fund should be implemented indefinitely or during the course of a defined period in relation to the conditions which are laid out in the drafted will“, Krasheninnikov explained.

The fund’s estate may be added to during its period of function, as well as through income from the management of the assets. From the assets, transferred to the fund, or from the income from the asset management of the fund, the payments will be issued to the persons specified in the will – this may be members of the testator’s family, various organisations or citizens who are not inheritors. The project allows the possibility for income or other financial sums (for instance, grants) to be paid to citizens who are defined as trustees or other parties to the fund. For instance, the fund will be able to transfer money to support gifted children, distinguished scholars or sportspeople.

According to the expert, hereditary funds are an important instrument for the inheritance, preservation and development of business. Such funds can be called for in the business community.

Furthermore, in Krasheninnikov’s opinion, the introduction of such an institute into Russian law can be considered an anti-offshore measure. The deputy claims that the possibility to establish a hereditary fund or trust exists in many countries and Russian business owners often transfer their business to offshore zones, in order to establish such a trust or a fund to solve issues with asset management after their death. The law should come into force from 1 September 2018.

The most famous example of a hereditary fund abroad is the Alfred Nobel Foundation, out of which the renowned Nobel prizes are paid.

Source: https://www.asi.org.ru/news/2017/07/20/nasledstvennye-fondy-zakon/

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