The estate planning trust

The use of the will, the only and mandatory means of expression foreseen by the code for having a post-mortem patrimonial situation, does not always constitute an adequate system of generational transmission of wealth capable of effectively satisfying the needs of private individuals, which however change over time in due to the natural evolution of social and cultural factors – such as, for example, the lengthening of the average life span or the spread of interpersonal relationships of the “para-family” type – as well as the reference economic and industrial models, which have brought with them the need to avoid dispersion of wealth in the generational passage of corporate assets, especially family-run businesses, but not only.

It is no coincidence that in the last decade, we have witnessed the concrete use of new legal instruments known as of “succession planning”, i.e. a regulation of a contractual nature or, in any case, an alternative to the will, suitable for dealing with the multiple occurrences expressed by the future deceased and enucleated by the best doctrine:

in the conservation of the unity of the family heritage;
in maintaining the economic destination of certain assets;
in carrying out the succession even outside the family nucleus;
in guaranteeing, beyond one’s life, the maintenance and educational, spiritual and professional training of certain individuals (especially if disabled);
in verifying the goodness of the capital structure already set during one’s life so as to be able to modify it if necessary.
An effective conventional form of the transmission of wealth suitable for achieving the purposes set out above, in place of the will (but also of the related institutions of our inheritance law), is represented by the institution of the “successory trust or inheritance trust”. This attitude is nothing more than a direct consequence of the structure and effects brought about by the trust. In general terms, the trust is that legal transaction by virtue of which the Settlor-testator transfers the ownership of certain assets to a Trustee by appointing the latter, under the possible control of a third party, the Guardian, to manage and administer them in favor of the beneficiaries, determined or determinable, according to a program outlined by the Settlor himself. It is possible that the trust is established through an inter vivos deed with post-mortem effects, as its attributive effects are implemented only after the Settlor’s death (so-called “trust with inheritance purposes”) or directly through an act of last will , as textually provided for by art. 2 of the Hague Convention of 1 July 1985, c.d. testamentary trust. A famous case of testamentary trust is the one drawn up, for example, by the tenor Luciano Pavarotti.

Regardless of how it was established, inter vivos or mortis causa, with the transfer from the Settlor to the Trustee, the assets become part of the latter’s assets by integrating a separate asset destined for the purpose, deploying a segregating effect: the assets in trusts which are incapable of being subject to personal affairs concerning the Trustee, the Settlor and the beneficiaries themselves.

The functionality of the trust to fulfill the succession cause of the Settlor, is highlighted in the possibility of enriching the negotiating scheme by satisfying the succession needs highlighted above. Through the regulation contained in the trust deed (programme), the Settlor-testator can:

– modulate the powers attributed to the Trustee and the Guardian, thus prolonging the possibility of verifying and possibly changing the originally prepared patrimonial structure even beyond one’s life;

– plan interests in order to take into account the changing contingencies of life. Consider, for example, the maintenance needs that the Settlor may have an interest in satisfying only for a certain period or in favor of only some people, even those outside their own family unit;

– may, in assessing the worthiness of the persons chosen as beneficiaries, appoint new or revoke previous beneficiaries;

– can modulate the powers attributed to the Trustee and the Guardian, thus prolonging the possibility of verifying and possibly changing the originally prepared patrimonial structure even beyond one’s life;

– May, in the case of a testamentary trust, maintain possession and management of the assets until the event of his death;

For the Settlor, this is functional to “testing” the patrimonial structure prepared for after his death. Furthermore, all of this is protected from any risks not inherent to the purpose of the trust through the separation of assets enjoyed by the trust fund.

Ultimately, it is quite evident how the trust lends itself to serve as a flexible and effective tool for succession planning.

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