The
Hague Convention on the
Law Applicable to Trusts
and on Their Recognition.
Hague
Convention
The
Hague Convention on
the Law Applicable
to Trusts and on Their
Recognition
Chapter
I
Scope
Article
I
This
Convention specifies
the law applicable
to trusts and governs
their
recognition.
Article
2
For
the purposes of this
Convention, the term
''trust'' refers to
the legal
relationship
created -- inter vivos
or on death -- by a
person, the settlor,
when
assets have been placed
under the control of
a trustee for the benefit
of a beneficiary or
for a specified purpose.
A
trust has the following
characteristics --
(a)
the assets constitute
a separate fund and
are not a part of the
trustee's own estate;
(b)
title to the trust
assets stands in the
name of the trustee
or in the
name
of another person on
behalf of the trustee;
(c)
the trustee has the
power and the duty,
in respect of which
he is
accountable,
to manage, employ or
dispose of the assets
in accordance with
the terms of the trust
and the special duties
imposed upon him by
law .The reservation
by the settlor of certain
rights and powers,
and the fact that the
trustee may himself
have rights as a beneficiary,
are not necessarily
inconsistent with the
existence of a trust.
Article
3
The
Convention applies
only to trusts created
voluntarily and evidenced
in writing.
Article
4
The
Convention does not
apply to preliminary
issues relating to
the validity of wills
or of other acts by
virtue of which assets
are transferred to
the trustee.
Article
5
The
Convention does not
apply to the extent
that the law specified
by Chapter II does
not provide for trusts
or the category of
trusts involved.
Chapter
II
Applicable
Law
Article
6
A
trust shall be governed
by the law chosen by
the settlor. The choice
must be express or
be implied in the terms
of the instrument creating
or the writing evidencing
the trust, interpreted,
if necessary, in the
light of the
circumstances
of the case.
Where
the law chosen under
the previous paragraph
does not provide for
trusts or the category
of trust involved,
the choice shall not
be effective and the
law specified in Article
7 shall apply.
Article
7
Where
no applicable law has
been chosen, a trust
shall be governed by
the law with which
it is most closely
connected.
In
ascertaining the law
with which a trust
is most closely connected
reference
shall be made in particular
to
(a)
the place of administration
of the trust designated
by the settlor;
(b)
the situs of the assets
of the trust;
(c)
the place of residence
or business of the
trustee:
(d)
the objects of the
trust and the places
where they are to be
fulfilled.
Article
8
The
law specified by Article
6 or 7 shall govern
the validity of the
trust,
its
construction, its effects
and the administration
of the trust.
In
particular that law
shall govern --
(a)
the appointment, resignation
and removal of trustees,
the capacity to act
as a trustee, and the
devolution of the office
of trustee;
(b)
the rights and duties
of trustees among themselves;
(c)
the right of trustees
to delegate in whole
or in part the discharge
of
their
duties or the exercise
of their powers;
(d)
the power of trustees
to administer or to
dispose of trust assets
,to
create
security interests
in the trust assets,
or to acquire new assets;
(e)
the powers of investment
of trustees;
(f)
restrictions upon the
duration of the trust,
and upon the power
to
accumulate
the income of the trust;
(g)
the relationships between
the trustees and the
beneficiaries including
the personal liability
of the trustees to
the beneficiaries;
(h)
the variation of termination
of the trust;
(i)
the distribution of
the trust assets;
(j)
the duty of trustees
to account for their
administration.
Article
9
In
applying this Chapter
a severable aspect
of the trust, particularly
matters
of administration,
may be governed by
a different law.
Article
10
The
law applicable to the
validity of the trust
shall determine whether
that law or the law
governing a severable
aspect of the trust
may be replaced by
another law.
Chapter
III
Recognition
Article
11
A
trust created in accordance
with the law specified
by the preceding Chapter
shall be recognised
as a trust. Such recognition
shall imply, as a minimum,
that the trust property
constitutes a separate
fund, that the trustee
may sue and be sued
in his capacity as
trustee, and that he
may appear or act in
this capacity before
a notary or any person
acting in an official
capacity.
In
so far as the law applicable
to the trust requires
or provides, such
recognition
shall imply in particular
--
(a)
that personal creditors
of the trustee shall
have no recourse against
the trust assets;
(b)
that the trust assets
shall not form part
of the trustee's estate
upon
his
insolvency or bankruptcy;
(c)
that the trust assets
shall not form part
of the matrimonial
property of the trustee
or his spouse nor part
of the trustee's estate
upon his death;
(d)
that the trust assets
may be recovered when
the trustee, in breach
of
trust,
has mingled trust assets
with his own property
or has alienated trust
assets. However, the
rights and obligations
of any third party
holder of the assets
shall remain subject
to the law determined
by the choice of law
rules of the forum.
Article
12
Where
the trustee desires
to register assets,
movable or immovable,
or
documents
of title to them, he
shall be entitled,
in so far as this is
not
prohibited
by or inconsistent
with the law of the
State where registration
is sought, to do so
in his capacity as
trustee or in such
other way that the
existence
of the trust is disclosed.
Article
13
No
State shall be bound
to recognise a trust
the significant elements
of
which,
except for the choice
of the applicable law,
the place of administration
and the habitual residence
of the trustee, are
more closely connected
with States which do
not have the institution
of the trust or the
category of trust involved.
Article
14
The
Convention shall not
prevent the application
of rules of law more
favourable
to the recognition
of trusts.
Chapter
IV
General
Clauses
Article
15
The
Convention does not
prevent the application
of provisions of the
law designated by the
conflicts rules of
the forum, in so far
as those provisions
cannot be derogated
from by voluntary act,
relating in particular
to the following matters
(a)
the protection of minors
and incapable parties;
(b)
the personal and proprietary
effects of marriage;
(c)
succession rights,
testate and intestate,
especially the indefeasible
shares
of spouses and relatives;
(d)
the transfer of title
to property and security
interests in property;
(e)
the protection of creditors
in matters of insolvency;
(f)
the protection, in
other respects, of
third parties acting
in good faith.
If
recognition of a trust
is prevented by application
of the preceding
paragraph,
the court shall try
to give effect to the
objects of the trust
by
other
means.
Article
16
The
Convention does not
prevent the application
of those provisions
of the law of the forum
which must be applied
even to international
situations, irrespective
of rules of conflict
of laws.
If
another State has a
sufficiently close
connection with a case
then, in
exceptional
circumstances, effect
may also be given to
rules of that State
which have the same
character as mentioned
in the preceding paragraph.
Any
Contracting State may,
by way of reservation,
declare that it will
not apply the second
paragraph of this article.
Article
17
In
the Convention the
word 'law' means the
rules of law in force
in a State other than
its rules of conflict
of laws.
Article
18
The
provisions of the Convention
may be disregarded
when their application
would be manifestly
incompatible with public
policy.
Article
19
Nothing
in the Convention shall
prejudice the powers
of States in fiscal
matters.
Article
20
Any
Contracting State may,
at any time, declare
that the provisions
of the Convention will
be extended to trusts
declared by judicial
decisions.
This
declaration shall be
notified to the Ministry
of Foreign Affairs
of the Kingdom of the
Netherlands and will
come into effect on
the day when this notification
is received.
Article
31 is applicable to
the withdrawal of this
declaration in the
same way as it applies
to a denunciation of
the Convention.
Article
21
Any
Contracting State may
reserve the right to
apply the provisions
of
Chapter
III only to trusts
the validity of which
is governed by the
law of a Contracting
State.
Article
22
The
Convention applies
to trusts regardless
of the date on which
they were created.
Article
23
For
the purpose of identifying
the law applicable
under the Convention,
where a State comprises
several territorial
units each of which
has its own rules of
law in respect of trusts,
any reference to the
law of that State is
to be construed as
referring to the law
in force in the territorial
unit in question.
Article
24
A
State within which
different territorial
units have their own
rules of law in respect
of trusts is not bound
to apply the Convention
to conflicts solely
between the laws of
such units.
