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TRUST IN 430 WORDS

Trust entered our jurisdiction when, with the law N.364 of 16th October 1989, Italy approved the text of the Hague Convention of 1st June 1985 (that controls the rules regarding the trust) and made it effective from 1st January 1992. The ratification of the Convention did not end in the transposition of the trust in the Italian jurisdiction, but gave the chance to the foreign trusts (which are ruled by a foreign law) to have legal force in accordance with our law and order.
Trust is a legal institute that derives from the English common law. In trust’s structure we have:

The Settlor:
The settlor is the subject that first decides to fund a trust through the transfer of goods’ ownership to the trustee. The unilateral funding deed of a trust is voluntary and establishes the rules for the trust operation and the assignment of the members of such operation. The settlor (which can be either a natural or a legal person) definitively and completely lose the goods’ ownership through the transfer.

The Trustee:
The cornerstone and totally new element for the Italian jurisdiction is the trustee, who receives the goods and related rights and has to administrate them in favor of the beneficiaries.
The trustee acquires the formal ownership of the goods with the only aim to realize the goal of the trust. His work, even if highly discretional, has to follow the rules of the trust deed (which is the funding act of the trust, signed by settlor and trustee).

Beneficiary or beneficiaries:
The other subject who has the right of ownership is the beneficiary, which is the receiver of the goods or the income produced by the trust.
A beneficiary could be: a natural person, a legal person, a company and even other trusts.

The Protector:
The protector is a subject who has the task to control the trustee’s activity and the power to make him follow the trust deed trough a strict supervision of the trust management (even through designation or revocation of the trustee).

The effect, typical of the trusts, is the property segregation under which the property given in trust stays out of the personal issues of the trustee (heirs’ and creditors’ rights, trustees’ bankrupt). The main characteristic of the trust is the decoupling of the ownership’s right, under which neither  the position of the trustee nor the beneficiary  correspond with the owner’s one (ex Article N.832 of the civil code in the system of civil right).

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