Book Review: Trusts in Prime Jurisdictions
A new reader of this, the third edition of Trusts in Prime Jurisdictions, of which Alon Kaplan is the General Editor, is in for a pleasant surprise. While the title might lead one to believe that the book contains only a survey of the principal trust jurisdictions, and the relevant legal and fiscal considerations, the work in fact covers a much greater scope.
As an illustration of the breadth of topics there is a thoughtful chapter on the achievements and shortcomings of the Hague Trust Convention by Filippo Noseda, an insightful article by Barbara Hauser on family governance issues and some very original thinking from Rosalind Croucher on the philosophical background to the freedom of disposition under the common law as opposed to the principle of forced heirship found in civil law systems.
The core chapters dealing with trusts in the 21 selected jurisdictions are concise, and the FAQ format used by Peter Maynard in the Bahamas chapter is particularly helpful to a reader who needs a quick summary of the relevant law. The chapters on Quebec and Japan may be of less interest to practitioners, although they provide an interesting example of non-common law systems that have embraced the trust concept. On the other hand, a chapter on Bermuda would have been helpful, if only because that jurisdiction certainly ranks among the principal offshore trust centres.
The decision to include a review of foundations is wise and timely, as this particular structure has always been favoured by clients from a civil law background, and a number of common law jurisdictions now offer this structure as an alternative to traditional trusts. The chapter on Liechtenstein foundations (the archetypical model) is particularly clear and informative, and the chapters on Panama and Jersey show how those jurisdictions have embraced the concept. It is perhaps a pity that the chapter on the Bahamas does not refer more extensively to the Bahamas foundation, which was introduced into that jurisdiction in 2004.
Asset protection planning is particularly well developed in the United States, and it is appropriate that two US practitioners, Gideon Rothschild and David Faust should each have contributed an excellent chapter on the subject. Gideon Rothschild includes a selective jurisdictional review, while David Faust gives practical guidelines on asset protection trust drafting.
Ziva Robertson’s chapter on trusts and divorce focuses on an issue that has increasingly been the subject of examination by the English courts, and while her main references are to UK decisions she also covers the issue of the recognition of foreign judgments. In this connection the comments on matrimonial disputes before the Jersey courts by Justin Harvey-Mills are particularly relevant.
The tax treatment of trusts is deliberately restricted to the high-tax jurisdictions that are likely to be of greatest interest to international practitioners, namely the United States, the UK (where Maggie Gonzalez has contributed a very comprehensive article on the taxation of offshore trusts) and Canada, but there is very helpful information to be found about the taxation of trusts in Israel, Australia, New Zealand and Switzerland. The Singapore tax system is also explained, although curiously there are no details given about the trust law of Singapore.
It is invidious to choose particular chapters for a special mention, but Paul Matthams’ article on the fundamental aspects of the trust deed should be essential reading for all trust draftsmen, and Martyn Gowar’s reminder of the ways in which trusts can be used is both instructive and comprehensive. He reminds us that trusts are also used in a commercial context, and the excellent article by David Hayton, which closes this book, explores in more detail the use of trusts in this area.
In all, this is a comprehensive guide, not only to the main jurisdictions for trusts and foundations, but also a highly useful source of information about many related topics that will be of significant added value to any practitioner whose work involves wealth management structures in a wide international context.
Publisher: Globe Law and Business, 2010
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