Nowadays resources from the public purse to support charitable purposes are increasingly restricted, so private involvement for this purpose is becoming ever more important. Many people wish to offer their support in this way. They wish thereby to demonstrate their social responsibility.

Benefactors are special people
By providing the funds they can implement their own ideas and ideals, so that the benefactor can pursue their individual goals. Therefore identification of the benefactor's motives is of very great importance. In many cases, the trust carries the name of the benefactor and continues to do so publicly in the long term.

Sustainability
A trust is set up in perpetuity, with the duty of holding the assets of the trust. The capital that is obtained may be used only for the objective of the trust.

Legal structures of trusts

Trust constituted with legal capability under civil law
Very often such an organisation is constituted as a trust with legal capability under civil law. This type of trust is advantageous if the benefactor wishes to ensure that the purpose he desires for the trust cannot be changed. The trust with legal capability under civil law is subject to statutory oversight. In this way the long-term existence and compliance with the articles of association can be achieved to a large extent. Such a trust can however only be approved if it has sufficient trust capital (generally at least 50,000 Euro).

Trustee foundation
A trustee foundation is not constituted as a trust with independent legal capability Such a trust is constituted as a contractual agreement between the founder and the trustee. Under this agreement the trustee has the duty in perpetuity to use the assets bequeathed him by the benefactor for the purposes specified by the benefactor. In addition he has the duty to administer the assets he receives as special separate assets. A foundation trust can be set up with relatively small amounts of capital (from 10,000 Euro). No official approvals procedure is required to set up such a trust. There is also no statutory oversight. However they must be reported for taxation purposes. The founder can delegate individual duties to a trustee, up to and including the entire administration of the trust.

Selected other forms of trusts
Other forms of trusts include trusts regulated by public law. These are set up by official bodies.

Family trusts serve above all the interests of the family. Their objective is to take over the existing assets of the family as a whole and to support members of the family from the proceeds.

Community trusts are independently operating charitable trusts by citizens for citizens. The purpose of the trust is generally formulated in broad terms.

Advisory service for the founder
We will work with you towards realising your trust idea. When you set up your trust you create an "undying" entity. Therefore it is very important that the correct basis is laid in perpetuity. We will show you the format of trust that is appropriate to your requirements, having regard to the taxation and legal aspects, so that the trust achieves precisely the objectives you seek.

Trust management

When the trust has been set up, it must be brought to life. We help you in the selection and implementation of a suitable project. We are also available to you as trustees, both through our society ABG Münchener Stiftungstreuhand GmbH and also as service providers for independently managed trusts.

Taxation optimisation

Inheritance taxes
The setting up of a trust or supplementary payments into a trust that already exists is of interest to those who have received assets as a gift or by inheritance following a death. The gift tax or inheritance tax arising can be retrospectively extinguished under " 29 Section 1 no. 4 ErbStG, if within 24 months of the date of the tax liability arising (§ 9 ErbStG) the assets are assigned under certain conditions to a trust recognised as serving charitable economic and cultural purposes.

Income tax

Increasing the special expenses deduction under § 10b Section 1a EStG
Funds applied as in the basic assets of a trust, up to 1 million Euro, can be offset against income spread over a period of ten years.
The increased special expenses deduction also carries with it an extension of the scope of application of the regulations: the amount to be deducted need no longer be applied in the year when the trust is initiated. The special expenses deduction applies also for supplementary payments into a trust that are made is subsequent years after initiation of the trust. Married persons can contribute an amount of 1 million Euro for each partner in the marriage, thus doubling the benefit.

Combining and increasing the contribution deduction to 20%

The amount of the contribution deduction is 20% of the overall amount of income
(§ 10 Section 1 page 1, 2 EStG). The contribution deduction amount can be carried forward with no limitation of amount. That means that a contributor can carry forward the contributions he made in the year 2009 even as far ahead as the year 2019. The advantage of this is that he can choose to declare the contributions in a year when his income is weaker.

Increasing the taxation limit under § 64 Section 3 AO to 35,000 Euro

The taxation limit for the commercial business under § 64 Section 3 AO is 35,000 Euro

Our services

• Advice on the creation of the trust concept and assistance with its implementation
• Tax and legal advice in connection with establishing the trust
• Carrying out asset transfers and asset structuring
• Business management as a trustee
• Performing the ongoing bookkeeping including generation of reports
• Ongoing tax declarations to the tax authorities