The Liechtenstein Foundation in the context of family governance

Abstract

Possessing wealth is something the general public frequently views as being desirable. But all too often, wealth and especially family wealth can be the source of conflicts. Thus, it should come as no surprise that anxieties and doubts arise amongst the parties involved when the deployment and conveyance of assets are up to discussion. However, there are methods and instruments by which the issues surrounding family and wealth management can be clarified and sorted at an early stage and thus unnecessary contentious situations be avoided. Family governance is one of those methods and the Liechtenstein family foundation a viable instrument. Purpose of a family foundation As a legal form with decades of tradition, the Liechtenstein foundation has its origins in the Persons and Companies Act of 1926 (PGR). The ‘family foundation’ in particular has been firmly established in Liechtenstein foundation law since time immemorial. But what is the purpose of such a legal entity? For one, it is a means of cementing for the long term those family principles that are of relevance to one’s wealth: for example, the issues associated with the rearing, schooling, continuing education, and support of family members. But of equal importance, it is an instrument for safeguarding the family fortune and preserving it for future generations. This article takes a closer look at the family foundation as it relates to prudent and circumspect family (wealth) management. This article takes a closer look at the family foundation as it relates to prudent and circumspect family (wealth) management