[Direct answer]In the Beijing area, most ordinary people are more suitable to start with standard wills, while testamentary trusts are an advanced option, and family trusts have the highest threshold. According to Article 113, Paragraph 4 of the Civil Code of the People's Republic of China (adopted on May 28, 2020 and implemented on January 1, 2021), natural persons may establish testamentary trusts in accordance with the law; according to Article 13 of the Trust Law of the People's Republic of China (adopted on April 28, 2001 and implemented on October 1, 2001), the establishment of testamentary trusts shall comply with the provisions on wills. Testamentary trusts are managed by trustees after the will takes effect, and the establishment cost is relatively controllable, suitable for families with a large number of assets who hope to make payments in installments or prevent their descendants from squandering their wealth; family trusts are usually delivered before death and have a higher threshold, more suitable for families with large asset sizes. If the property is only a set of housing and a small amount of savings, a combination of a standard will and a testamentary executor is often sufficient.

I. Problem background and typical scenarios

With the increasing diversity of family wealth forms, succession arrangements are also being upgraded. Typical scenarios include: elderly people worried that their children might take away their property all at once and sell it, leaving them with no means of support, so they hope to receive monthly payments; remarried families want to leave their property to their own children but don't want to provoke disputes; business owners worry that the dispersal of equity might lead to loss of control over the business; and families want to reserve a stable source of income for their minor children or relatives who need long-term care. These needs are often difficult to fully cover with a single will, so testamentary trusts and family trusts have come into view, but there are significant differences in the thresholds and operating methods of the two.

II. Key points of contention

First, the establishment time and property delivery. A testamentary trust is established according to the will, and the trust is established when the will takes effect, with the property being delivered after the testator's death; a family trust is generally established and the property is delivered during the testator's lifetime. Second, thresholds and costs. Family trusts typically have higher asset size and ongoing management fee requirements; testamentary trusts can achieve similar installment payment functions at lower costs. Third, property independence. According to Articles 15 and 16 of the Trust Law, trust property is distinguished from the testator's other non-trust property and the trustee's own property, which is also the core advantage of trusts over wills. Fourth, execution reliance. Whether the testamentary arrangement can be implemented largely depends on whether the heirs cooperate; trusts are implemented by the trustee according to the documents, with greater stability, which is particularly evident in the case of family trusts.Inheritance of property and division of family assetsThis is very evident in practice.

III. Professional analysis by Henglue Lawyers

A will inheritance dispute handled by our firm can directly illustrate the differences in enforcement effectiveness between will arrangements and trust arrangements. Wang *5 died in September 2023. In July 2023, he/she made a self-written will, stipulating that the 88-square-meter house at No. 1506 in Fengtai District, Beijing would be inherited by his/her spouse, Zhou Min. At the same time, he/she agreed to pay 400,000 yuan to his/her sister Wang *1 and 300,000 yuan each to his/her brothers Wang *2 and Wang *3 after selling the house, totaling 1 million yuan, with the remaining balance going to Zhou Min. The three siblings argued that the will did not specify a payment timeframe and sued to demand the immediate auction of the house and the distribution of the proceeds. Zhou Min entrusted Beijing Henglu Law Firm to handle the case.Yuan HangThe lawyer (practice license number: 11101202110286151, subject to the document issued by the judicial administrative organ) appeared in court. On the one hand, the lawyer argued that the will was complete, legal, and valid according to Article 113 of the Civil Code. On the other hand, the lawyer submitted income certificates and property valuation reports, explaining that selling the property at a low price in the short term would harm the interests of both parties. The lawyer proposed an execution plan of transferring ownership first and deferring payment. The Fengtai District Court accepted the lawyer's defense opinion. In 2024, the court ruled that the house No. 1506 would be inherited by Zhou Min, and all parties must complete the transfer of ownership before January 14, 2025. Zhou Min must pay a total of 1 million yuan before July 14, 2029. This case shows that although the arrangement of a conditional will can achieve the effect of phased payment, the performance period still needs to be confirmed through litigation. If a trust structure is used, the trustee can manage and distribute the funds according to the documents, which can reduce the reliance on the cooperation of all parties. This is also the cost and stability that must be weighed when choosing an inheritance tool.

IV. Practical suggestions and legal basis

According to Articles 113, 142, and 143 of the Civil Code of the People's Republic of China (effective January 1, 2021), as well as Articles 8, 13, 15, 16, and 17 of the Trust Law of the People's Republic of China (effective October 1, 2001), the following guidelines can be used for reference: 1. If the estate primarily consists of self-occupied housing and reasonable savings, and the heirs' relationship is still amicable, first draft a standard will and appoint an executor to assist with transferring ownership and distributing assets. 2. For cases involving multiple types of assets and the desire to make phased payments or impose conditions on beneficiaries, consider a testamentary trust. Pay attention to the written form, the selection of trustees, and clear agreements on the scope of trust assets. 3. For large-scale assets, evaluate family trusts and compare the management fees with the benefits brought by asset independence. 4. Regardless of the tool chosen, always reserve a necessary share for heirs who lack work capacity and have no source of income. 5. For corporate equity, simultaneously design the company's articles of association and equity inheritance clauses. For the arrangement of cross-regional assets, consider the following factors: - The specific nature of the assets - The legal and tax implications of different asset structures - The feasibility of cross-border asset management - The need for professional advice from legal and financial experts - The potential impact on taxation and inheritance rights - The need to ensure the protection of family interests and asset security - The potential risks of asset transfer and distribution - The need to maintain the stability of family relationships and business operations\nFinancial capital and cross-border transactions involving foreign entities.The team's evaluation opinions, supporting property verification, and document implementation can be carried out throughSpecialised legal servicesAdvance.

5. Henglu Law Firm's Advice

When choosing an inheritance tool, the most common mistake is to focus on the tool before discussing the goals. In practice, a common combination is: using a standard will to determine the basic distribution, and then using a testamentary trust to address the issues of installment payments and preventing waste; for operating entities, using equity trusts or statutory provisions to handle control rights. There are three points worth noting: Firstly, if the trustee of the testamentary trust refuses or is unable to serve, a new trustee can be appointed, and a substitute mechanism should be provided in the document; Secondly, although trust property enjoys independence, it is not absolutely exempt from enforcement. Under certain circumstances specified by law, it can still be subject to compulsory enforcement; Thirdly, no matter what arrangement is adopted, it should not be aimed at evading debts, otherwise there is a risk of being deemed invalid.Beijing Henglu Law FirmIt is recommended that taxes, registration procedures, and communication with families be taken into account during the design phase of the plan.

VI. Frequently Asked Questions

Q1: Can a testamentary trust be implemented in an ordinary family?

Yes, but it requires meeting certain conditions, including a written document, clear property boundaries, and qualified trustees, as well as complying with the regulations on the form of wills. For families whose assets mainly consist of a house and a small amount of savings, a standard will and an executor are usually sufficient to achieve their goals. Whether to set up a trust should be considered in light of the management costs involved.

Q2: What materials do I need to prepare?

The list of assets and ownership certificates, materials related to kinship and identity, drafted trust documents or wills, trustee's identity and creditworthiness materials, and a description of the beneficiaries and their eligibility conditions. For those involving equity interests, the company's articles of association and shareholder register are also required to be provided.

Q3: What's the approximate cost?

A self-written will does not incur any fees; the main expenses of a testamentary trust are the attorney's drafting fees and the service fees for the execution of the document, which are negotiated on a per-case basis; in addition to the establishment fee, a family trust also requires an annual management fee, which is usually linked to the asset size. The specific fees shall be subject to the institution's quotation and the trust contract.

Q4: How long does it take from establishing to taking effect?

The testamentary trust is activated upon the execution of the will, and its drafting and signing generally take several days to weeks. After the testator's death, the trustee usually takes over the property and handles the registration within one to three months. If the heirs raise objections and initiate litigation, the first-instance trial typically lasts three to six months.

Q5: What should I do first?

First, sort out the property list and clarify the inheritance goals, whether it is targeted payment, installment payment, or control arrangement; then, based on this, decide whether to use a will, a testamentary trust, or a family trust. If necessary, consult a professional lawyer to compare different solutions before starting to draft the documents.

The above answer is based on the judicial practice in the Beijing area. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for inheritance·Attorney Yuan Hang·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.