The question of the cost of a family foundation appears at a very early stage of conversations with private clients. Although the family foundation is a strategic instrument whose value is measured by long term effect, its costs are very practical and require realistic planning. PLA.partners advises on how to structure the budget of setting up and ongoing servicing of a family foundation in a way coherent with the client’s possibilities and goals.
Founding capital of the family foundation
The cost starting point is the founding capital of the family foundation, which is PLN 100,000. This is a statutorily set minimum threshold whose achievement is a condition for establishing the foundation. The founding capital need not be covered with cash. The founder may also contribute movables or real estate toward the founding capital of the family foundation.
Maciej Pilarek, attorney and partner at PLA.partners, points out that for most private clients this threshold is not an obstacle, since the assets contributed to a family foundation significantly exceed this amount. What is important is careful design of the contribution structure, since it affects later tax settlements and the efficiency of the distribution policy.
Costs of legal advice and the notary
The second layer of costs consists of legal advisory fees, notary fees and court fees. They vary depending on the specific case, including the complexity of the client’s family and business situation, the structure of asset contributions, the number of founders and the specific goals of the family foundation.
In projects conducted by PLA.partners, the scope of legal advice covers preparation of the foundation’s statute, design of the distribution policy, choice of the model of the foundation’s bodies, tax assessment of contributions and preparation of the founding documentation and notarial servicing. The client receives a quotation at the start of the process, tailored to their specific situation.
Ongoing costs, corporate servicing and accounting
A family foundation also generates ongoing costs, often not small. They concern primarily full accounting, possible remuneration of management board members and the supervisory board, reporting and ongoing corporate servicing.
In private client practice this area requires realistic planning. The family foundation is a long term entity, therefore the budget of its servicing should be designed in a multi-year horizon. PLA.partners experts help the client prepare a realistic picture of expenditures so that the first year of the foundation’s operation does not surprise with servicing costs.
Remuneration of the family foundation’s bodies
An additional cost is the remuneration of members of the family foundation’s management board and, where appointed, members of the supervisory board. The amount of these remunerations depends on the founder’s decision expressed in the statute and the remuneration policy. In many projects the members of bodies are family members of the founder, in others persons from outside the family are selected.
In projects conducted by PLA.partners, the structure of remuneration of the foundation’s bodies is designed together with the statute, so that the remuneration is adequate to the real scope of duties and coherent with the family’s succession goals.
Legal and business consequences for the client
From the decision-making perspective within the family, the costs of a family foundation mean:
- a minimum founding capital threshold of PLN 100,000,
- the option to cover the capital with movables or real estate,
- one-off costs of legal advice, the notary and court fees,
- ongoing costs of full accounting and corporate servicing,
- potential remuneration of management board and supervisory board members,
- the need for long term planning of the foundation’s budget.
Possible actions, a plan for the business owner
In the practice of the PLA.partners team, preparing the budget of a family foundation involves:
- establishing the structure and value of the founding capital,
- planning the costs of legal advice, the notary and court fees,
- assessment of ongoing costs of accounting and corporate servicing of the foundation,
- decision on the structure of remuneration of management board and supervisory board members,
- schedule of asset contributions and the distribution policy,
- periodic review of the foundation’s budget over a multi-year horizon.
Contact PLA.partners Law Firm
Do you need legal support or an individual analysis of your matter? Visit PLA.partners and contact our team, we will help assess the situation and propose specific solutions.
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