Czech Republic: trust fund — a newly introduced asset management option
The recent re-codification of Czech civil law has introduced a new legal instrument called a trust fund or simply a trust. In adopting the concept originating from Anglo-Saxon legal tradition, the Czech Republic has become one of the few countries in Continental Europe whose legal systems can offer this vehicle, which is attractive for both business and private use.
A trust is a vehicle constituted by a settlor (founder) who transfers property thereto. The trust is administrated by a trustee in favour of a beneficiary — the person(s) intended to benefit from the vehicle. These persons may all be either different or coincide in one person.
An essential feature of a trust is that it has no legal personality, and thus may be only defined by its property and purpose. A trust enables the establishment of a distinct and autonomous set of assets, designated to fulfil any public or private purpose. Its essence is such that while any assets transferred to a trust cease to be owned by the settlor upon the constitution of the trust, they do not become assets owned by anyone else, such as a trustee or a beneficiary…
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