A Research On The Legal Issues Of Family Trust In China

Trust is not just an ‘Imported product' to China, but also an ‘Emergency product' to China. It has been more than 30 years since the first Trust Company founded in 1979. It was an unimaginably hard time in the 30 years that the trust industry has been reorganized and adjusted for 5 times, hundreds of trust companies were closed, billions of bad loans has been cleaned up. The promulgating of Trust Law in 2001 marked the trust industry has come to a new age of legality. The trust industry benefited more than 10 years of golden age after 2011. The scale of asset management of trust soared each year. The scale of asset management of trust came to 15620 billion by the end of the 3rd quarter of 2015 enable trust industry among the four pillar finance industries together with the banking industry, the stock industry and the insurance industry. However, the trust industry has come to a decline since 2013 due to the economic structure adjustment of China and the fierce completions in the market, etc, which made the trust industry has to be reformed. The family trust is becoming a hot spot in academia and practical field in the foresaid background.The family trust has a long history which originated in the way of family fortune granting in the ancient Britain. Then it was widely used in the field of family fortune management and it was adopted as a method to manage the family fortune both by the countries of common law systems and the countries of civil law systems in varying degrees. The family trust started late in China in 2012 when the first product of family trust came to birth. Several other products soared after that and strong reflections had made to the market, but the business of family trust had not enjoyed a smooth development due to the lack of family trust legal system as well as the theoretic and practical issues of family trust had not been solved. The foresaid in this paragraph has stressed the main cause for me to make this research on the topic of family trust.The main contents of my dissertation are as following:In this section of introduction, I clarify the meaning and background why I choose family trust as my research topic. First, family trust is in the needed of modernization of nation management system and nation management capability. The practice and development provide the fortune a safe, stable and legitimate way or outlet in the circumstance that the property owner has not been confirmed. The family trust carries on the responsibility of inheriting wealth smoothly which provides time and space for the confirmation of property owner. Secondly, the family trust is in the needed of economy strategy transformation. The family trust has transformed itself from a convenient financial instrument to a stable pillar to macro-economy in the background of the age of the new normal economy. Thirdly, the family trust is in the needed of the wealth accumulation coming to a critical point. The people of high net worth concern a lot on the security of wealth and the wealth inheritance, which marks a tremendous potential market value and growth potential. Fourthly, comprehensively deepen reform will provide continual space for family trust to grow and develop. The promulgating of housing tax, inheritance tax is predictable. Comprehensive property rights will be confirmed, the space of the policy will be widened, and the advantage of trust system will appear constantly. Finally, the industry of trust will return to its origin to sustain the development of family trust. In this background, research on the relevant legal issues of family trust has a very practical and theoretical meaning. Relevant marks on research results, research method, research ideas and creation as well as scantiness also follows.The first chapter mainly introduces the origin and theoretical basis of the trust system. Starting from the origin of trust, this chapter introduces the formation and evolution of the “dual ownership” and “numerus clausus principle” in both common law system and civil law system. Moreover, I have examined their contradiction and conflict as the foundation of the theory of modern trust. Meanwhile, I have already listed those civil law countries' efforts and attempts on transplanting trust system from other countries.The second chapter is to examine the theoretical basis and practical development of “a family trust”. Firstly, I try to define the connotation of the family trust in Chinese context. Then, the family trust and other similar concepts are made comparison. Based on this discussion, I clarify the function of “family trust” in the legal system. Secondly, the role of the beneficiary of the trust has been positioned as family property. This work can be consistent with the principle of independent property of trust. After that, I have made comparison between common law and civil law system focusing on trust law's development and current legal practice. Finally, I elaborated the development of Chinese trust law and current social demands for trust in China. Based on our five efforts on trust system' adjustment, I examined Chinese exploration and practice on trust law.In the chapter three and four, the topic is about legal issues in Chinese family trust system. Staring on four elements on the establishment of family trust, I clarify concerning points on parties, properties, legal behaviors, and the purpose of trust in the field of legal practice and academia.The chapter five is about the substantive operation of family trust in China. Two focuses in this chapter. One is about tax avoidance. Depended upon the theory and practice, I suggest that the focus of this rule is not for increasing governments' income but for preventing tax loss. The other is about the system of investigator of family trust. The legal role of the investigator, its qualification, and related privileges has been examined.The final chapter is my suggestions toward improving supervising system on family trust. Based on discussing present structure of supervising system of family trust, related legislation policy implication has been given from the perspective of the core of trust law, and administrative approaches of trust company, and self-supervision of trust company.