Trust or holding? A simple guide to protecting and managing your assets

Imagine having worked a whole lifetime to build a solid estate: real estate, savings, shares in your company. Now, the question you are probably asking yourself is: “How can I protect all this for myself and for my children, avoiding wasting wealth on unnecessary taxes or family disputes?”.

You often hear complicated terms like Trust and Holding, but understanding the difference is essential to make the right choice. In this article, we will explain these instruments as if we were sitting at your desk, without “legalese”, to help you understand which one suits your case.

Why it is important to plan (before it is too late)

Owning complex assets or large estates does not only mean enjoying the wealth, but also managing it. Without a strategy, you risk:

• Bearing an excessive tax burden.
• Putting your assets at risk in the event of business problems or creditors.
• Creating quarrels among the heirs at the time of succession.

That is why legal instruments such as the Trust and the Holding exist: they are like “tailor-made suits” cut to your needs.

The Trust: your armoured “safe”

Think of the Trust as a special safe.

When you set up a Trust, you take part of your assets (houses, money, paintings, shares) and put them inside this safe. You entrust them to a trusted person (the Trustee) who has a precise task: to manage and protect them, not for himself, but for the beneficiaries you have chosen (for example, your children or grandchildren).

What are the advantages?

• Total protection: Once placed in the Trust, those assets are no longer legally “yours”, so your personal creditors cannot touch them. They are armoured.
• Planning for the future: You can decide today how and when your children will receive the estate, perhaps preventing them from squandering it as soon as they turn 18.

From a tax point of view, the Trust may be taxed immediately or the taxes may be paid by the beneficiaries when they receive the money: it all depends on how we build it together.

The Holding: the “control tower” of your companies

If the Trust is a safe, the Holding is a control tower (or an umbrella).

It is a company that does not produce bolts or services, but its job is to own the shares of other operating companies.

What is it for?

1. Order and command: If you have several companies, the Holding groups them all under a single hat, making it easier to manage them and move cash from one to another without problems.
2. Lawful tax saving (PEX): This is the most interesting part. If the Holding sells the shares of one of its companies at a gain, the Italian State allows you to pay no tax on 95% of that gain (provided certain rules are complied with). It is called Participation Exemption, but you can call it a “smart tax advantage”.

Which one to choose? Or perhaps you need both?

There is no single answer, but there is a general rule:

• If your main goal is to protect personal assets and plan the inheritance for the family, the Trust (or the family asset fund, fondo patrimoniale) is often the main road.
• If your goal is to manage your businesses better and pay less tax legally when you sell or buy companies, the Holding is the ideal instrument.

There are then other instruments, such as the Family Pact (patto di famiglia, perfect for deciding which of the children will lead the company, paying off the others) or Foundations, useful for large estates to be handed down over time.

Warning: things must be done properly

There is a golden rule: these instruments are not used only to avoid paying taxes.

The Italian Revenue Agency watches closely. Every operation must have a real economic reason (protecting the family, reorganising the business group, etc.). If a “sham” Trust is created only to defraud the tax authorities, trouble soon follows.

For this reason, “do it yourself” is off limits. You need a lawyer who cuts the legal suit made to measure for you.

Do you have doubts about which is the best road for you?

Estate planning is a delicate subject that requires tax, civil and succession expertise. Do not leave the future of your estate to chance.

Our law firm deals with the protection of family and business assets. Our lawyers are supported by a notary for notarial matters.

Contact us today for a confidential consultation.

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Frequently asked questions

What is the difference between a trust and a holding?

According to the article, the trust serves above all to protect personal assets and plan the inheritance for the family; the holding is a company that owns the shares of other companies and serves to manage businesses better.

What is a trust and who manages it?

The settlor entrusts part of his assets to a trusted person, the trustee, who manages and protects them for the benefit of the beneficiaries he has chosen, for example children or grandchildren.

What tax advantage does the holding offer?

According to the article, with the participation exemption (PEX), if the holding sells the shares of one of its companies at a gain, it pays no tax on 95% of that gain, provided the conditions laid down are met.

Can a trust be used only to avoid paying taxes?

No: every operation must have a real economic reason, because the Italian Revenue Agency watches closely and a “sham” trust created to defraud the tax authorities brings trouble.

What other instruments exist?

The article mentions the family pact, to decide which child will lead the company by paying off the others, and foundations, useful for large estates to be handed down over time.

Sources: civil and tax rules on trusts, holdings and participation exemption referred to in the article. Author: Attorney Renato Giuseppe Fiorentino, Naples Bar. Informational text, not a substitute for an opinion on your case.

Translated from the Italian original; updated on October 18, 2026.

(Read also): Legal guides from Studio Legale Fiorentino · Joint account or foreign account: can it be attached and what does the other holder risk · Foreign trust to avoid paying debts? Here is why the creditor can take action in Italy