On April 17, the Inheritance Trust Research Association of Bareun Law LLC held its 100th seminar under the theme "The Advent of a Super-Aged Society and the Promotion of Will-Substitute Trusts."
On the 17th, attorney Woongkyu Cho presented at the 100th seminar and publication celebration of the Inheritance Trust Research Association. Provided by Bareun
Attorney Woongkyu Cho, who delivered the keynote presentation at the seminar, emphasized the necessity of will-substitute trusts as a legal alternative for asset management and succession in Korean society, where aging is accelerating. As of 2024, the population aged 65 and over in South Korea has already surpassed 10 million?exceeding the entire population of Seoul?and is expected to reach 40% of the total population by 2050. Consequently, the management and succession of assets among the elderly has emerged as a significant social issue.
In particular, with a sharp rise in diseases related to cognitive impairment among the elderly, there is a growing need to prepare for important decisions such as asset management, medical judgment, and admission to care facilities. In fact, the number of cyber fraud victims aged 60 and over surged from 2,796 in 2019 to 10,435 in 2023, and lawsuits over compulsory share return claims and inheritance property disputes continue to rise.
Cho stated, "The adult guardianship system, mandate contracts, and the existing will system each have their limitations." He explained, "The adult guardianship system is initiated only after grounds for guardianship arise and is difficult to view as a proactive asset management measure. Mandate contracts leave ownership with the principal, which limits the safe and independent management of assets. Wills have strict formal requirements and are difficult to execute."
As an alternative, he proposed asset management and succession solutions utilizing trusts. Trusts offer the advantage of maintaining the independence of trust property even after the settlor's bankruptcy or death, protecting beneficiaries from creditors, and allowing for various asset management strategies.
Cho remarked, "Will-substitute trusts allow for more flexible succession planning than wills, can respond to changes in family relationships, and enable customized designs tailored to the characteristics of heirs." However, he also pointed out that current will-substitute trusts have limitations, such as issues with transferring ownership to third parties, fee burdens, and restrictions under the Capital Markets Act.
To overcome these challenges, he suggested introducing the "trust declaration method," which is commonly used for will-substitute trusts in the United States. Cho explained, "The trust declaration method eliminates the need to transfer ownership to a third party, reduces fees, and is not subject to the Capital Markets Act, thus enabling more flexible inheritance planning."
Meanwhile, at the publication celebration for the 100th seminar commemorative book held after the seminar, industry and academic figures?including officials from financial sector PB centers and Soonsup Jung, president of the Korea Trust Society?attended to congratulate the 100th seminar and the publication of the commemorative book.
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