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Insurance is one of the most commonly used tools for wealth transfer in Taiwan. It offers clear advantages — quick payout, named beneficiaries, and immediate liquidity to cover urgent expenses such as final medical costs, estate taxes, or outstanding loans.
However, when insurance is viewed as part of an overall succession structure, it becomes clear that it is not a complete solution. In particular, gaps exist in three key areas: taxation, creditor protection, and cross-border compliance. These gaps must be filled through proper structural planning.
Once an insurance policy is paid out, the proceeds that reach the beneficiary become personal assets. This means they are subject to potential seizure if the beneficiary faces debt, bankruptcy, or legal disputes. In cases involving divorce, forced execution, or asset liquidation, the payout may even be included in settlement or division proceedings.
From the policyholder’s side, creditors can also seek forced surrender of the policy to claim its cash value as repayment.
If the beneficiary is a minor, and no prior guardianship or trust arrangement exists, inheritance rights may be compromised once guardianship transfers.
In the case where a beneficiary becomes mentally incapacitated or disabled, the payout landing directly into their account poses significant risk — not only could the funds be frozen or misused, but the beneficiary may also lose access to the protection the policy was meant to provide.
By combining insurance with trust planning, an institutional layer of protection can be built in advance. Instead of paying the claim directly to an individual, the funds can first flow into a trust, where a trustee distributes payments according to predefined purposes — such as medical care, children’s education, living expenses, or other essential needs.
A trust structure can:
For cross-border families, trusts can also streamline tax reporting, jurisdictional governance, and international fund flows, minimizing compliance risks.
In short, insurance is an excellent starting point for succession planning, but only a well-designed structure ensures the cash is securely received, properly used, and sustainably distributed.
When insurance is integrated with a trust, structure transforms uncertainty into control — creating true family asset protection.
At Dreamer Group, we specialize in helping clients optimize cross-border wealth structures. From personal and family trusts to offshore company setup, tax compliance, and global asset allocation, we design customized, system-based strategies built on trust and structure. Every global move you make becomes a solid step toward achieving your long-term vision.
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