On July 8, Samsung Securities announced the launch of its new will-substitute trust brand, "Samsung Securities Heritage."
A "will-substitute trust" is, as the name suggests, a trust contract that can serve as a substitute for a traditional will. The client (trustor) enters into a trust agreement with Samsung Securities (trustee) during their lifetime and entrusts their assets to Samsung Securities. After the client's death, the assets are distributed to pre-designated beneficiaries according to the terms of the trust agreement.
Traditional wills must meet legal requirements such as being handwritten or notarized, and their execution can be restricted without the consent of heirs. There is also a significant risk of disputes over the validity or authenticity of the will. In contrast, a will-substitute trust is legally valid from the time it is established during the client's lifetime. After death, the financial institution executes the agreement immediately as stipulated in the contract. This structure offers advantages in terms of transparency and efficiency in execution.
The will-substitute trust offered by Samsung Securities adopts a modular structure, where individual customized contracts are combined according to the client's asset composition rather than through a single contract. For example, cash assets are managed through a Money Market Trust (MMT), real estate through a "Real Estate Management Trust," and bonds through a bond-type trust. Separate trust agreements are established for each asset type, allowing management and operation according to the client's preferences. While alive, the client can directly design the designation of heirs, the ratio of inheritance, the timing of payments, and the conditions for distribution.
Clients who own real estate can entrust their assets through Samsung Securities' "Real Estate Management Trust," which involves transferring registered ownership to Samsung Securities for management purposes. This is particularly useful for clients who find it difficult to manage ownership due to long-term stays abroad or health issues in old age. In addition, if the real estate is held in trust and then disposed of upon the client's death, this structure can help reduce capital gains tax compared to a typical pre-death disposal.
The Samsung Securities will-substitute trust not only facilitates family asset succession but also features a "charitable trust" function that enables clients to leave their legacy to society. Through the trust agreement, clients can designate specific hospitals, universities, or non-governmental organizations (NGOs) as beneficiaries after their death.
With a will-substitute trust, clients can design an inheritance plan to be executed after their death while also fulfilling the need to manage their assets during their lifetime. The trust can also be structured as a regular payment plan using overseas exchange-traded funds (ETFs), allowing heirs to receive periodic payments for living expenses. Certain tax benefits may also be achieved through proper planning.
However, a will-substitute trust does not resolve all tax issues. Even if a trust agreement is established, trust property is still considered part of the trustor's estate, and inheritance tax is imposed in the same manner as ordinary inheritance. Additionally, even if real estate is included in the trust, it is still counted in the "number of houses" used as the basis for property tax, comprehensive real estate tax, and capital gains tax assessments.
Nevertheless, the advantage of a will-substitute trust is that it allows for clear asset distribution planning during one's lifetime and ensures prompt, dispute-free execution after death. For this reason, it is regarded as a practical alternative that can reduce both tax-related confusion and emotional conflict. The trust also provides detailed guidance on potential issues related to statutory reserved shares for heirs.
The will-substitute trust contract is designed by combining dozens of elements such as contract duration, beneficiary composition, and distribution methods, depending on the client's asset size and composition. Samsung Securities conducts consultations with private bankers, trust managers, and tax and legal experts to finalize the contract. A Samsung Securities representative stated, "A will-substitute trust is not just a financial product, but a design tool that reflects the client's philosophy and intentions. By starting inheritance planning during one's lifetime, we aim to help reduce family disputes and enable meaningful asset transfers."
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