Definition of a trust [European Regulation in matters of international successions]

Definition of a trust

The extent of the exclusion must be measured.

By the terms of Article 1(2) j^[1], “the creation, administration and dissolution of trusts” are excluded from the scope of application of the Regulation.

In other words, the validity of a trust must continue to be governed by the national rules of conflict of the Member States.

If the validity of a trust was subject to autonomy law in a Member State prior to the entry into force of the Regulation, that rule will continue to apply after the Regulation enters into force.

Example :

An American national set up a trust when he was a resident in New York. He was a resident in Belgium when he died.

The validity of the trust is subject to Articles 122 to 125 of the Belgian Private International Law Code, and in principle it is American law that will apply.

The succession regime of the trust, however, will be subject to Article 21 of the Regulation^[2], and therefore to Belgian law in the case at hand.

Note :

The question that is certain to arise is that of what to do if in the requested Member State, trusts were subject hitherto to the rule of conflict on successions.

In the future, will it be possible to make trusts subject to the provisions of the Regulation?

The doctrine provides an affirmative answer in considering that Article 1-2^[3] does not prohibit the application of the Regulation to the trust.

Unilateral extension is possible via legislation or case law.

Although the creation, the administration and the dissolution of the trust are not within the scope of application of the Regulation, the effects of the trust on the succession are within that scope.

Ultimately, trusts are treated in the same way as donations. The validity of donations is subject to the national rules of conflict, but the question of their succession regime (Article 23 i^[4]) is subject to the Regulation.

In those Member States of the European Union that have the notion of a reserved share, the trust may not provide a way of bypassing that share.

Notes

article 1 § 2 f,g,h,i,j,k
The following shall be excluded from the scope of this Regulation:
- f) the formal validity of dispositions of property upon death made orally;
- g) property rights, interests and assets created or transferred otherwise than by succession, for instance by way of gifts, joint ownership with a right of survivorship, pension plans, insurance contracts and arrangements of a similar nature, without prejudice to point (i) of Article 23(2);
- h) questions governed by the law of companies and other bodies, corporate or unincorporated, such as clauses in the memoranda of association and articles of association of companies and other bodies, corporate or unincorporated, which determine what will happen to the shares upon the death of the members;
- i) the dissolution, extinction and merger of companies and other bodies, corporate or unincorporated;
- (j) the creation, administration and dissolution of trusts;
- k) the nature of rights in rem; and
Article 21
General rule
1. Unless otherwise provided for in this Regulation, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.
2. Where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a State other than the State whose law would be applicable under paragraph 1, the law applicable to the succession shall be the law of that other State.
Article 1 §2 l
- "any recording in a register of rights in immovable or movable property, including the legal requirements for such recording, and the effects of recording or failing to record such rights in a register."
Article 23 §2 i
- That law shall govern in particular: [...] any obligation to restore or account for gifts, advancements or legacies when determining the shares of the different beneficiaries;