A trust is a legal arrangement in which one party (the settler) transfers some assets to another party (the trustee) obliging the latter, through a fiduciary relationship, to respect his wishes as defined in the trust instrument with regard to the management of the assets for the benefit of a third party (the beneficiary) or for the aim of a specific purpose (purpose trust).
The commitment of the assets is done through the transfer of the property from the settler to the trustee who becomes legal and a full holder of the assets until the end of his mission, corresponding to the end of the trust.
The exercise of the property right on the transferred assets is limited to the pursuit of the purposes defined by the settler in the trust deed. The trustee ensures the execution of the wishes of the settler according to the rules set in the trust deed.
All kinds of assets can be committed in a trust, for instance: real estate (houses), movable property registered in public records (cars, boats), amounts of money (investments), credits, government bonds, shareholdings, artworks.
The assets transferred to a trust represent a fund isolated from the property of the settler and of the trustee and, for this reason, cannot be touched by creditors.
Italy has been among the first countries that has signed the “Convention on the law applicable to trusts and on their recognition” concluded in The Hague in 1985, ratified with the law n. 364 of 1989.
The following doctrinal elaboration and jurisprudence have confirmed the full legitimacy of the creation of the so-called domestic trusts.
These are trusts characterized by the fact that the settler, the beneficiaries, the trustee and the assets are Italian while the governing law belongs to one of the several foreign countries managing the trust.