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A family fund is a foundation (sometimes a STAK) that manages and distributes family assets according to established rules — independent of the individual wishes of family members at any given time. Used to protect assets across generations, to arrange business succession in a structured manner, or to finance social causes within the family (study funds, sickness support). Not a separate statutory type — legally, an ordinary foundation with a specific purpose.
The short answer
- What: a foundation with a family-related purpose (asset management, support, succession).
- Legal form: usually a foundation, sometimes a STAK for share management.
- For whom: families with assets or a family business to preserve for generations.
- Goals: education, succession, social support within the family, tax optimization.
When do you choose a family fund?
Three typical scenarios:
- Asset protection across generations. A wealthy entrepreneur wants to prevent his assets from being fragmented or poorly managed after inheritance. A family fund with rules for distribution and investment provides structure.
- Family business succession. Shares of the family business are transferred to a fund (often a STAK) that arranges distributions to family members without giving them direct control. See also establishing a STAK.
- Social goals within the family. A study fund for grandchildren, support during illness, or a first home. The fund makes these agreements binding and structured.
Family fund versus heir structure
A family fund offers advantages over direct inheritance:
- Continuity: the fund continues to exist if individual family members die, quarrel, or squander assets.
- Conditional benefits: benefit only upon certain events (study, marriage, entrepreneurship), not automatically in cash.
- Tax optimization: gift and inheritance tax can be reduced through ANBI status or smart structures. Provided they are carefully set up.
- Protection against external claims: assets in the fund are more difficult to access in the event of divorces or bankruptcy of individual family members.
How do you set it up?
- Determine the family strategy. What must the fund achieve? For whom? With which payout rules?
- Drafting articles of association. Purpose concrete, distribution criteria clear, composition of the board established (often representatives per family branch).
- Notarial deed at the notary.
- Contributing assets: gifting, bequests, transferring shares. Tax considerations for each route.
- Regulations: internal regulations with practical rules for benefits and applications.
- First board meeting and formal establishment.
Tax aspects
Family funds offer multiple tax routes:
- Donation to a foundation: may be exempt from gift tax with ANBI status.
- Inheritance tax: bequests to a public benefit foundation are exempt; for family funds without ANBI status, standard rates apply.
- Wealth tax: foundations do not pay wealth tax (Box 3 is private).
- Payment to family members: in principle not taxable for the recipient (no income), unless it is considered disguised wages or a dividend distribution.
Specialized tax advice is indispensable for family fund taxation — the routes vary significantly depending on the family assets and objectives.
Board composition
Common setups:
- Family members plus independent director. Avoids unilateral family decisions and offers objective review.
- One member per family branch. In large families, this prevents one branch from dominating.
- Rotating chairmanship. Between branches or generations.
- Supervisory Board: often a notary, tax specialist, or external confidential advisor.
The WBTR rules (Law on Governance and Supervision of Legal Entities) also apply to family funds. Conflict of interest is a serious point of attention — a director may not decide on their own distribution.
Honest recommendation
A family fund is not a DIY project. The combination of family dynamics, tax planning, and long-term governance requires specialized guidance. Discuss in advance with a notary and tax specialist which structure is suitable, how distributions are determined, and how the board is renewed across generations. A well-structured family fund preserves assets and relationships; a poorly structured one leads to the opposite.
For the general foundation: establish a foundation. For equity focus: establish a STAK.
Frequently Asked Questions
A foundation (sometimes a STAK) that manages and distributes family assets according to established rules — independent of individual wishes at any given time. Not a separate statutory type; legally, it is an ordinary foundation with a family-related purpose.
For intergenerational wealth protection, structured business succession, or for social purposes within the family (study fund, support). Especially for families with substantial assets or a family business.
A family fund offers continuity (continues to exist), conditional payouts (only upon certain events), tax optimization (potentially lower gift and inheritance tax), and protection against external claims (divorce, bankruptcy). Inheriting is more direct but less manageable.
Common practice: family members plus an independent director, often one member per family branch, with a rotating chairmanship. Supplemented by a supervisory board (notary, tax advisor, or external confidential counsellor). WBTR requirements regarding conflicts of interest are of particular importance.
That may be possible, provided it is carefully structured. ANBI status (for charitable purposes) grants exemption from gift and inheritance tax. Wealth tax (Box 3) is waived for foundation assets. Distributions to family members are generally tax-free, unless they are considered disguised income.
Notary €600 – €1,500. Additional legal and tax advice €2,000 – €8,000, depending on complexity. For large family fortunes, this is a fraction of the value over generations.
Yes. In a family business, a STAK is often established that holds the shares and issues certificates to family members — economic interest with the family, legal control with the STAK board. A combination of a family fund and a STAK occurs frequently.
