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Dr Niklas Schmidt

Wolf Theiss, Vienna

niklas.schmidt@wolftheiss.com

 

Title: Trusts in Prime Jurisdictions, 5th edition (December 2019)

Publisher: Globe Law and Business Ltd

Editors: Alon Kaplan and Barbara R Hauser

In the past, the world was bifurcated and mobility was low. Civil law countries had foundations, and common law countries had trusts – so that a practitioner from a civil law country did not have to understand the intricacies of a trust and a lawyer from a common law country did not need to know anything at all about foundations. This has obviously changed, and in our practices as private client tax lawyers we all have clients from foreign countries with different wealth management vehicles that we have to understand in order to be able to render correct advice.

As a lawyer from a civil law country, I am thankful for having had the possibility to review a two-volume book dealing with trusts, which has recently been updated and which greatly helped me bridge the gap and expand my knowledge. The editors of Trusts in Prime Jurisdictions (Alon Kaplan from Israel and Barbara R Hauser from the United States) are well-known practitioners. They have brought together more than 50 contributors, mostly from common law countries but also a few from civil law jurisdictions. The book has been produced in association with STEP and is also available as an e-book (at www.globelawandbusiness.com/books).

Its first volume contains jurisdictional overviews. These cover the usual suspects that one would expect in connection with trusts (the UK, the US, Canada, Australia, New Zealand, Guernsey, Jersey, Bermuda, British Virgin Islands, Cayman, Gibraltar and Hong Kong), but also a few others. The book's second volume deals with estate planning, family governance, asset protection, trust litigation, money laundering and other topics relevant in the context of trusts.

There are too many highlights to mention, but let me pick a few. Of particular interest was the chapter by Hein Kötz from the Max Planck Institute for Comparative and International Private Law in Hamburg, who covers the Hague Convention on the Law Applicable to Trusts and their Recognition and explains its various provisions. Germany has not signed this convention and will – according to Kötz – apparently not do so, since German international private law is already quite complex and those cases that courts had to decide on to date were actually handled quite well by applying German civil law principles.

A fascinating jurisdiction in respect of trusts is the Canadian province of Quebec: Marilyn Piccini Roy from Canada explains the challenges that come from a civil law tradition co-existing with a trust law. Vanessa King and Christopher McKenzie give a good overview of the trust regime in the British Virgin Islands, including the increasingly popular private trust company, which is basically a company that has as its main function to act as the trustee of a specific trust. Dominique Jakob covers Switzerland, where trusts cannot be set up under domestic law, but where they are at least recognised due to Switzerland's ratification of the Hague Convention (due to the country's strength as a banking and private wealth centre).

Michael W Galligan's chapter on the US was also interesting: the US has signed, but not ratified, the Hague Convention. However, the Uniform Trust Code (a kind of template) has been adopted by 34 states, and this might pave the way for a ratification at a later point in time. The chapter on Liechtenstein by Dietmar Loretz and Jacqueline Marxer-Tschikof deals with both trusts and foundations, both forms being available in this jurisdiction. Filippo Noseda from the UK gives a great overview of the implications of the OECD's Common Reporting Standard, which threatens the privacy of settlors and beneficiaries. Paolo Panico from Luxembourg shares his views on public UBO registers (introduced by way of the EU's 5th Anti-Money Laundering Directive) and what this means for trusts.

In summary, Trusts in Prime Jurisdictions is highly recommended for the international practitioner, whether from a civil law country or from a common law jurisdiction.

 

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