Title XIV: Trusts

A trust is a transaction by which one or more settlors transfer property, rights or security interests, or a bundle of property, rights or security interests, present or future, to one or more trustees who, keeping them separate from their own assets, act for a specific purpose for the benefit of one or more beneficiaries.

The trust is established by law or by contract. It must be express. If the property, rights or securities transferred to the trust patrimony depend on the community existing between the spouses or on an indivision, the trust contract is established by notarial deed on pain of nullity.

A trust contract is void if it proceeds from a liberal intention for the benefit of the beneficiary. This nullity is of public order.

Only the credit institutions mentioned in I of Article L. 511-1 of the Monetary and Financial Code, the institutions and services listed in Article L. 518-1 of the same code, the investment firms mentioned in Article L. 531-4 of the same code, portfolio management companies as well as insurance companies governed by article L. 310-1 of the Insurance Code. Members of the legal profession may also act as fiduciaries.

The settlor or trustee may be the beneficiary or one of the beneficiaries of the trust agreement.

Unless otherwise stipulated in the trust agreement, the settlor may at any time appoint a third party to ensure that his interests are safeguarded in the performance of the agreement and who may have the powers granted by law to the settlor. Where the settlor is a natural person, he may not waive this option. The settlor must inform the trustee of the appointment of this third party.

The trust contract determines, on pain of nullity: 1° The assets, rights or securities transferred. If they are future, they must be determinable; 2° The duration of the transfer, which may not exceed ninety-nine years from the signing of the contract; 3° The identity of the settlor or settlors; 4° The identity of the trustee or trustees; 5° The identity of the beneficiary or beneficiaries or, failing that, the rules…

Where the trust agreement provides that the settlor retains the use or enjoyment of a business or property for business use transferred to the trust assets, the agreement entered into for this purpose is not subject to Chapters IV and V of Title IV of Book I of the Commercial Code, unless otherwise stipulated.

An assignment of receivables made under a trust is enforceable against third parties on the date of the trust contract or the endorsement evidencing it. It only becomes enforceable against the debtor of the assigned claim when the assignor or the trustee notifies him of it.

On pain of nullity, the trust contract and its amendments shall be registered within one month of their date with the tax department of the trustee’s registered office or with the non-resident tax department if the trustee is not domiciled in France. Where they relate to immovable property or rights in rem in immovable property, they shall, under the same penalty, be published under the conditions provided for in articles…