Page 12

International Trust Jurisdictions and Forced Heirship By Michael Reason*

With increased population mobility over the last half century, trustees and beneficiaries of family trusts in common law jurisdictions have been faced from time to time with claims by “heirs� (the spouse or dependents of a settlor or other beneficiary) who are resident or citizens of a civil law jurisdiction, or who have property situated in a civil law jurisdiction. These heirs may claim under laws applying in that jurisdiction to succession or separation.

www.nzbar.org.nz

12

The claim would be on the basis that the settlor of the common law trust exceeded his or her rights in the civil law jurisdiction, to settle or divest him or herself of their property in their lifetime. The trustee in the common law jurisdiction may accordingly be faced with, for example, a judgment from a civil law court that the trust property was never lawfully settled on the trustee, and that the civil law state views the property as belonging to the civil law heirs or spouse (an action in rem). Alternatively, if it is viewed as settled, the spouse or heirs may claim a refund of its equivalent value (an action in personam).

Profile for New Zealand Bar Association

At the Bar April 2019