Trusts and Foundations

Three important trends in the long-term evolution of trust law are shifting its centre of gravity from England to the world of international financial centres. First, there is a growing demand for trust law to meet new needs. In particular, the growth in sophistication of IFC clientele to include much more complex matters – both for high-net-worth clients and for business clients – than the older ‘hold assets and cut cheques’ business is increasing the demand for innovation offshore. Over the last few decades, this has put IFCs at the forefront of trust law’s development of new means of solving ever more complicated problems. Second, part of the means of meeting that demand has been statutory innovations in trust law, from comprehensive trust laws on the Jersey model, to more targeted innovations such as Cayman’s STAR trust legislation. These are enabling significant innovations in trust law to develop. Using collaboratively designed statutes drawing on private sector expertise, IFCs have been able to give their trust law large jumps in capacity. Third, at the same time, IFC judiciaries have developed both their own bodies of case law and the calibre of judicial personnel necessary to take a leading role in trust

Definition The Austrian private foundation: is a legal entity without owners, members or shareholders (meaning that there is nobody holding shares in a private foundation); is established through a declaration of intent by the founder under private law (rather than under public law); is endowed with assets by the founder (either at establishment or at a later point in time); is to serve a legally valid purpose determined by the founder; is not allowed to carry out a commercial activity exceeding a merely ancillary activity nor to be a general partner of a registered partnership; is represented in its dealings through a board of directors; and is registered with the commercial register as a result of which it comes into legal existence. Purposes Austrian private foundations can be used for many purposes, including the following: for holding wealth and supporting the members of a family; for estate planning (eg in order to prevent the fragmentation of shares in an incorporated family business due to successive cases of inheritance); for asset protection (eg in order to keep assets out of reach of creditors or spouses in the event of divorce); for the avoidance of inheritance tax (but this is no longer

The main goals of this amendment to the law are: i) to avoid conflicting rulings on international successions, by partially harmonising Swiss law with the relevant European regulation (EU Regulation no 650/2012 on Succession law, that came into force in 2015); and ii) to provide the necessary clarifications required by recent case law and legal doctrine. These new provisions also give citizens a little more autonomy in planning their inheritance. Key changes affect jurisdiction and applicable law. On these two subjects, after a brief reminder of current law, we will further discuss a few of the important amendments made. Jurisdiction Coexistence of PILA law and other regulations can give rise to issues regarding jurisdiction, even in a simple case, for example where a deceased person had ties with at least two jurisdictions, having had their last residence set in one jurisdiction, and their real estate situated in another. In certain instances, two states would therefore separately declare having jurisdiction to deal with the estate, causing a positive conflict of jurisdiction to arise. Switzerland’s Jurisdiction Toned Down To Avoid Positive Conflict Current law gives jurisdiction to Switzerland to deal with an estate when ‘foreign authorities’ fail to do so. It is