[1mm Financial Talk] Banks Join Hands with Universities to Lead the Spread of Donation Culture

Hana, Shinhan, Woori Banks, etc. Successively
Sign Trust-Based Inheritance Donation MOUs
Provide Comprehensive Inheritance and Gift Solutions

[Asia Economy Reporter Song Hwajeong] Banks have recently been taking the lead in spreading the culture of donation by consecutively signing business agreements with universities.

According to the banking sector on the 15th, there has been an increase in business agreements related to donation trusts between banks and universities. Hana Bank has signed business agreements this year with Korea University, Seoul National University, and Ewha Womans University. Shinhan Bank signed a donation trust business agreement with Konkuk University last month, and Woori Bank did the same with Samyook University.

A donation trust is a testamentary substitute trust in which money, real estate, monetary claims, and securities held are entrusted and managed during the donor’s lifetime for their retirement, and upon their death, donated according to the settlor’s wishes. In the past, wealthy individuals donated by directly handing over cash to universities, but nowadays, assets are managed through banks and donated after death.

In the case of Hana Bank, it was the first in the financial sector to launch the testamentary substitute trust ‘Hana Living Trust’ in 2010 and signed business agreements with Bundang Seoul National University Hospital in 2014 and the nonprofit organization World Vision in 2015. It has steadily signed agreements with welfare foundations and recently expanded its scope to universities. Shinhan Bank revamped the ‘Shinhan S Life Care Testamentary Substitute Trust’ in November last year. KB Kookmin Bank launched the ‘KB Great Heritage Donation Trust’ in September last year, and Woori Bank also launched the ‘Woori Naeri Love Trust Service’ in November.

These donation trust services provided by banks offer comprehensive solutions not only for donations but also for inheritance and gifts related to donations. From the donor’s perspective, consulting on complex issues related to donations makes choosing a donation trust a more convenient and accurate way to handle posthumous asset arrangements. Recently, with the aging population and the increase in single-person households, there has been a rise in people wishing to donate the homes they live in after death, leading to the provision of real estate donation trusts.

Although related trust products have existed for a long time, their recent activation is due to the aging era and the spread of awareness about social responsibility. A representative from a commercial bank said, "Recently, as awareness of social responsibility and donation has spread and taken root, demand for such donation trusts seems to be increasing," adding, "Also, with the increase in single-person households, more people are choosing to donate their assets after death rather than passing them on as inheritance."

The demand for donation trusts is expected to increase further. Another commercial bank representative said, "Although business agreements are currently being signed mainly with universities, there is high demand for donations from hospitals and welfare foundations, so it will spread even more in the future."