Private foundations: law and practice
For many years, common-law practitioners were likely to admit that their practical knowledge of private foundations could be contained on the back of a postage stamp. Trusts were the planning tool of choice in common-law jurisdictions, foundations the preserve of civil law.
In the past decade, however, private foundation legislation has been introduced at a dizzying pace in both common-law and civil-law jurisdictions. Many existing foundations have had to be examined to ensure that they are fit for purpose in light of the many new tax information exchange agreements signed around the globe. Even the pioneer of the private foundation, Liechtenstein, has implemented a substantial overhaul of its legislation. While foundations have steadily gained in profile in the quest for robust yet flexible asset protection and succession planning, the comparative lack of authoritative case law on the subject means that, for many, the private foundation is still an untested and unknown area of planning.
Private Foundations: Law and Practice by John Goldsworth seeks to address this, and is a timely addition to the body of work on private foundations. Comprehensive in span and pulling together diverse themes from the history of the modern foundation to the basics of the role of the protector, and covering an impressive range of countries, Goldsworth has produced a clear text that will be a useful addition to many practitioners’ libraries.
In practice, many private foundations set up historically do not pass muster when the essential nature of the structure (and ongoing activity) is examined. As such, the chapter on private foundations and shams is of particular interest. Although there is currently no case law specifically dealing with foundations as shams, Goldsworth takes existing trust case law that applies these principles to conclude that shams are not restricted to trusts, before going on to a thought-provoking extrapolation of which sham principles are relevant when dealing with private foundations.
The short chapter ‘Foundations and matrimonial litigation’ also takes trust case law as the base for further analysis. Despite Goldsworth’s vigorous scrutiny, both this chapter and the chapter dealing with the international taxation of foundations leave the reader with the feeling that private foundation law remains a developing area of law, where a measure of uncertainty persists.
“Goldsworth takes existing trust case law and concludes that shams are not restricted to trusts”
Although the breadth of coverage provided in the book cannot be criticised, it would be rendered more user-friendly by the inclusion of a few simple comparison tables summarising the relevant issues jurisdiction by jurisdiction, simply for ease of digestion.
That said, if there is an area of study relating to private foundation law not covered in this book, it would be a surprise. While thus far, Japanese foundation law is not something I have needed to have even a passing knowledge of, should the need arise in the future, this will be the tome I reach for. Lucidly written, meticulously researched and comprehensive in jurisdictional scope, this book is thoroughly recommended to the common-law and civil-law practitioner alike.
Title: Private foundations: law and practice
Author: John Goldsworth
Publisher: Mulberry House Press
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