STEP

Title Research

Trust & Fiducie: Concurrents ou Compléments?

  • Author : STEP France and Academy & Finance
  • Author : Howard S Simmons
  • Date : April 2011
ABOUT THE REVIEWER: Howard S Simmons TEP is a Senior Partner at Simmons, daSilva & Sinton LLP

This book is the result of a STEP France Conference in June 2007, chaired by Jean-Marc Tirard. Unlike many conference publications, this book is outstanding. The chapters are written in English or French, depending upon the author. Donovan Waters, a leading common-law scholar, wrote about the four distinctive characteristics of a trust that are timeless. Yet, because the law of trusts is ‘uncodified and being moulded still’, perhaps it may not be possible to write about timeless characteristics of the trust. Claude Witz, a leading civil-law scholar in France, wrote about the distinctive characteristics of the ‘fiducie’. The fiducie is based on Roman law, but never developed into the same usefulness and flexibility as the trust. However, civil-law countries are now looking again at the fiducie, and how or whether it should provide similar usefulness and flexibility as the trust. Unlike the trust, whose use and characteristics are similar throughout common-law jurisdictions, the fiducie can vary significantly in civil-law jurisdictions.

Since the Hague Convention on the Law Applicable to Trusts and on their Recognition in 1985, some civil-law jurisdictions now recognise the trust, without having anything comparable to it. Latin America, whose countries are based on civil law, has had a longer and closer relationship with the trust. An even closer relationship with the trust is with the province of Quebec in Canada. Quebec is a largely French-speaking civil-law jurisdiction within an English-speaking common-law North America. In 1994, Quebec enacted a law of fiducie, comparable but not the same as a common-law trust. France, in 2007, created a fiducie by statute, but limited in scope and not covering succession and usual estate planning; in part, as Jean-Paul Béraudo wrote, not to miss the train in the globalisation of the trust. If this limited fiducie is successful, then it may in the future be extended.

Civil-law jurisdictions mostly have done one of the following:

abrought the trust into its civil code, as in the Province of Quebec;bratified the Hague Convention and provided a legal framework for the trust, as in Luxembourg, by attempting to replace the trust by the fiducie;cratified the Hague Convention without first providing a legal framework for the trust, such as Italy or Switzerland;dadopted a fiducie, but without ratifying the Hague Convention, as has France; orenot ratified the Hague Convention or implemented a trust or expanded the fiducie, such as Germany.

It is difficult to discuss a trust without also discussing taxation. The book has separate chapters on the taxation of the trust in Luxembourg, Italy, Switzerland, Belgium, the Netherlands and France. Taxation of trusts is a concern when that jurisdiction has no trust law. Some jurisdictions, such as Italy, have a tax law specifically addressing the trust. There is also coverage of trust taxation in the United States (in French) and the United Kingdom. While intended for non-UK readers, the 20-page outline of the general principles of trust taxation in the UK, by Paul Matthews, and of how a fiducie might be taxed is a useful summary for UK practitioners. Common-law countries now may have the problem of figuring out what exactly is a fiducie, since there is no exact equivalent in common law, and then how to tax it. Civil-law countries have had the same problem with trusts.

Those in the common-law systems are satisfied and familiar with the trust and usually do not look elsewhere. Leading members in civil-law jurisdictions have needed to look elsewhere as well as developing, in their own systems, the fiducie, as an alternative to the trust. The subtitle of the book and a question throughout the book is the following: is the fiducie a partner or a competitor of the trust? Will the fiducie in civil-law jurisdictions replace the need for a trust or will it exist alongside the trust? In an evolving and even rapidly changing field, the book does not, and cannot, answer this question. For common-law lawyers, the question they must ask themselves is whether they can continue to be ignorant of the fiducie.

ISBN: 978-2-9700602-0-8
Price: USD180
Publisher: Academy & Finance, Geneva

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