There are nearly 830,000 family businesses in Poland, generating revenues worth PLN 322 billion a year. The legislator, noticing the difficulties in planning their succession, decided to introduce into our legal system instruments ensuring protection against fragmentation of assets arising in connection with business activity. On May 22, 2023, the Act of January 26, 2023 on family foundations entered into force. The justification for the legal act states that the aim is to avoid „the world-famous scenario in which children divide their parents’ property, and then their descendants divide the property into smaller and smaller parts and only implement their own plans.” The legislator considered the existing solutions – such as investment funds collecting family assets or the so-called family constitutions – to be insufficient. The use of a family foundation structure is intended to prevent the so-called „emigration of assets”, i.e. a situation in which Polish entrepreneurs decide to transfer their assets to foreign foundations or trusts, through comprehensive strengthening of legal tools allowing „to retain capital in the country for many generations and increase the potential of domestic investments.”
A family foundation – an entity with assets that are not divided into shares – is intended to ensure the continuity of a private enterprise, in particular for the purposes of securing the family. It has economic powers such as selling property, participating in companies and granting loans. It supports beneficiaries financially, educationally and organizationally. As a rule, the beneficiaries of such a foundation are to be family members, but this is not a condition, as the basic idea is to continue the business activity. The task of the new institution is to implement the objectives set by the founder – it can only be a natural person with full legal capacity – based on the transferred assets. A family foundation is to provide specific benefits to specified beneficiaries, which may include: a natural person, a non-governmental organization conducting public benefit activities or the founder of the family foundation.
In the current legal situation, the family foundation has a significant impact on the shape of inheritance law, primarily in the field of the institution of legitime. The most important changes are as follows. The catalog of sources of satisfying the compulsory share has been supplemented – it includes benefits from the family foundation and property in connection with the dissolution of the family foundation, transferred to the person entitled to the compulsory share (Article 992 § 2 of the Civil Code). The obligation to include the founding fund of the family foundation contributed by the testator and property in connection with the dissolution of the family foundation was added to the inheritance when calculating the statutory share. The assets of the family foundation taken into account when calculating the statutory share should come exclusively from the testator. Similarly as in the case of donations – when calculating the statutory share, the founding fund of a family foundation and property in connection with the dissolution of the family foundation are not taken into account if the contribution or dissolution took place more than ten years ago, counting back from the opening of the inheritance or – in certain situations – at a time when the testator had no descendants. The value of the founding fund of a family foundation and property in connection with the dissolution of the family foundation is calculated according to the state at the time of their transfer, and according to the prices at the time of determining the compulsory share. If the family foundation is an heir, a debt collection legatee or a beneficiary of the testator, it will be liable for the compulsory share in this respect under the existing rules. Benefits received from the family foundation by the entitled person reduce the value of the compulsory share, while the compulsory share received reduces the value of future benefits due to the beneficiary from the family foundation. The foundation may be liable for the payment of the compulsory share – as an heir if it receives an inheritance from the founder or another person, and as a beneficiary – if it receives a donation from the founder or another person.