Research on Inheritance of Wealth in Mainland China and Upgrade of Family Trusts in the 21st Century

Abstract

In the turbulent second half of the twentieth century, with the reform and opening up, a large number of entrepreneurs emerged in China who seized the dividends of the times. With the passage of time, the "generation" is nearly in its twilight years, and it is urgent to make a transition from creating wealth to preserving wealth. According to the "2020 China Family Wealth Sustainability Report" jointly released by CCB Trust and Hurun Research Institute, China will have 39 trillion in wealth in the next 20 years from the first generation of founders to the second generation. However, it is worth thinking about what kind of scientific and mature financial planning tools can help break the curse of "the rich can't be more than three generations". With the current development, China's family trust industry is rapidly rising. Family trusts can just help high-net-worth individuals achieve intergenerational inheritance of wealth, isolation and protection of assets and other functions. The objective of the study is to research the complementary relationship between wealth inheritance and family trust upgrading in mainland China in the 21st century. It uses qualitative research and literature analysis methods to analyze the development background and value of Chinese family trust industry. The results of the study revealed that the family trust industry in mainland China has potential market development space, which needs to be adjusted according to the characteristics of China's economic environment.