[PB Notebook] If Asset Management Is Difficult, Solve It with Trusts

Shin Juhyun Kyobo Life Comprehensive Asset Management Team Wealth Expert

Statistics continue to show that South Korea is on the verge of entering a super-aged society. As of last month, the population aged 65 and over exceeded 10 million, accounting for 19.51% of the total population. It is projected that by 2025, 20% of the entire population will be aged 65 or older, marking the arrival of a super-aged society. Changes in the population structure are also altering the asset distribution among generations. The first baby boom generation holds 46% of the country's total assets, emerging as a major player driving the Korean economy.

Entering a super-aged society will bring changes to the industrial structure due to shifts in the average age of economic activity, and improvements in policies related to the key concerns of the elderly population will be necessary. Phenomena such as the expansion of the senior market and the emergence of disparities between social classes will also occur. Consequently, asset management for the senior demographic has become more important than ever. This background explains the growing interest in trusts.

A trust refers to entrusting the management and disposition of assets to another person for a specific purpose. In other words, the trustor, who entrusts the assets, delegates a financial company (trustee) to manage and dispose of the assets so that ownership and benefits are transferred to the beneficiary after a certain period or upon specific events such as death. The trust is established through a one-on-one legal contract between the trustor and trustee, fully reflecting the trustor’s circumstances and plans regarding when, how, and to whom payments will be made. Because it takes into account family composition, age, gender, marital status, health condition, asset composition, as well as life goals and lifestyle, it differs significantly from recommending a specific product. In other words, a trust is the epitome and core of comprehensive asset management.

Trusts are broadly classified into will-substitute trusts, gift trusts, guardianship trusts, disability trusts, and insurance claim rights trusts. The insurance claim rights trust is scheduled to be implemented in the third quarter of this year. In Japan, as of last year, the amount of comprehensive trust assets reached approximately 864 trillion yen (about 8000 trillion Korean won). This shows a huge gap compared to the Korean trust market, which is growing at nearly 20% annually. The main reason appears to be Japan’s earlier entry into an aged and super-aged society. Considering the situation of those currently in their 50s and 60s 20 to 30 years from now, the trust market in Korea is also expected to grow significantly. Demand for trusts is already on the rise.

If you worry about inheritance disputes after your death, want to leave more assets to a specific child or grandchild, or need someone to take care of you reliably if you develop dementia, a trust can be an excellent solution. Market volatility is increasing daily, and with the emergence of various financial products, asset management is becoming difficult to handle individually. If you consider safe asset management and a prosperous life journey, it is recommended to consult with a trust expert.

Shin Juhyun, Wealth Expert, Comprehensive Asset Management Team, Kyobo Life Insurance

This content was produced with the assistance of AI translation services.