Trust

A trust is created when a settlor transfers assets to a trustee, who holds and manages them in accordance with the terms of the trust instrument for the benefit of the beneficiaries. The Netherlands does not recognise the trust as a domestic legal institution under the Civil Code, but gives effect to foreign trusts pursuant to the Hague Trust Convention of 1985.

The trust is principally relevant in the fields of international wealth planning, estate planning and tax advisory work. In practice, it is commonly employed for asset protection purposes or to structure cross-border estates.

Dutch courts and notaries examine the recognition and operation of a trust by reference to the Convention and public policy. Lawyers advise clients on the tax consequences and on the enforceability of such arrangements in the Netherlands.