Mar 05 2025 16 mins
Estate plans and lifetime gifts are often based on discretionary distributions to beneficiaries. But famed investor Warren Buffett and movie star Ashton Kutcher have suggested an alternative, in which beneficiaries do not receive gifts – instead, those beneficiaries can take out a loan from a trust, or can ask a trust to make an investment in a beneficiary’s venture.
This episode explores this concept, called a “family bank” or “family venture capital fund.” This structure can be used to facilitate loans and investments for a beneficiary, which can serve the settlor’s overall purpose.
This episode highlights the advantages of a family bank and lays out opportunities to structure the entity for proper governance, investment philosophy and asset protection.