Purpose of a TrustUnlike the Anglo-American model, the trust in Liechtenstein law may be set up for an indefinite period. It can be used in the same way as a foundation, but permits more flexible arrangements as its purpose is not limited in any way, as is the case under foundation law. The trust is the legal relationship created by a trust agreement between the Settlor and the trustee whereby the Settlor assigns fixed or movable assets or rights to the trustee. The trustee is required to manage and use the assets entrusted to him in his own name pursuant to the directives drawn by the Settlor for the benefit of one or more third parties (beneficiaries).
Name and languageThe name of the trust can be freely chosen in any language, but enquiries must first be made to the Liechtenstein Land and Public Register Office to establish whether the name is still available. Names of countries, places and national or international organizations are not allowed as part of the name. The chosen name must always be accompanied by the word “Treuhänderschaft” or “Trust” in unabbreviated form.
CapitalNo minimum founding capital is prescribed. The trust may, for example, be endowed with CHF 1,000.
The participants are:
- The settlor (founder) hereby the terms of the contractual relationship must be set out in writing (trust deed = act of constitution);
- The trustee or trustees (acceptance of the office in written form);
- The beneficiary or beneficiaries.
CreationThe formation of the trust is effected when the trust deed is signed by the Settlor and trustee or by a letter or declaration of trust. The optional entry in the Public Register (instead of depositing) does not have any constitutive effect. Liechtenstein law embodies no provisions preventing perpetuation.
Registration – depositing
Filing of accounts
Termination – revocation
- with the assent of all the beneficiaries, the Settlor and the trustee;
- by the Settlor;
Asset Protection Trust (APT)
Creditors of the Settlor
The Settlor should settle the trust at a time when he has no creditors and does not infringe any statutory inheritance claims. The creditors may file claims for a maximum period of five years.
Heirs of the Settlor
Heirs may bring a claim within a maximum period of three years after the death of the Settlor if their statutory inheritance rights have been infringed.
Creditors of the beneficiariesThe creditors of the beneficiaries may only file claims on the trust assets by compulsory enforcement or bankruptcy proceedings to the extent that claims accrue personally and directly to the beneficiaries and to the extent that the trust deed does not specifically contain a provision on the inalienable nature of the benefits.
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