The government is currently considering (included on the government’s agenda for the meeting on 5 October 2015) a major amendment of the Civil Code, the Act on Public Registers and other laws, which inter alia significantly affect the regulation of trust funds. The amendment will primarily introduce the mandatory registration of trust funds in the Register of Trust Funds and also govern the mandatory data to be included in the register.
In terms of specific changes, this mainly concerns the mandatory registration of trust funds in a register, which will have a constitutive nature, therefore, the trust fund will only be established on entry in the register. Thus, where a trust fund is established today on the acceptance of its administration by the trustee, in the future this will only mean its foundation, which precedes the establishment thereof. However, in the event, of the foundation of a trust fund for provision in the event of death (will, legacy, inheritance agreement), it will be established on the death of the testator; mandatory registration will be merely declaratory in nature.
Of the data that will be compulsorily entered in the register, the most important will be the identification of the founder, the beneficiaries and the trustee. The designation of beneficiaries will only be effective from the date of entry in the register. The amendment therefore completely eliminates the current anonymity of the beneficiaries of trust funds and allows anyone to uncover their ownership structure, which could significantly reduce their attractiveness to potential founders.
Besides these major changes, the amendment is also expected to introduce a new obligation in the statute of the trust fund to specify the number of trustees and, in the case of multiple trustees, to also specify the manner in which they act on behalf of the fund. This data will also be compulsorily entered in the register, by which the amendment hopes to provide greater protection and legal certainty for third parties. As well as the constitutive registration of the trust fund in the register, the amendment naturally also includes its constitutive deletion from the register.
The following information should therefore be entered in the register of trust funds after the amendment enters into force: the name of the trust fund, its purpose, the date of the establishment and expiry of the trust fund and its identification number, identification of the founder, the number of trustees and the manner in which they act on behalf of the fund, identification of the trustees, and if the trust fund has a private purpose, then also the identification of beneficiaries and other matters specified by law or required by the trustee.
For existing trust funds, the amendment will introduce mandatory registration in the register within six months of its entry into force, with the same deadline for the registration of the beneficiaries of existing trust funds. If no application for registration is filed within this period, the amendment strictly stipulates that the management of the trust fund ends in this case. Similarly, if an application for the registration of beneficiaries is not filed within this period, the effects of their nomination or other designation expire.