A Trust Fund as a Result of the Czech Attempt to Legally Transplant Trust: A Disappointment as a Child of an Expectation? Selected Statutory Provisions from the Foreign Lawyer Points of View

Copyright©Filip Čeladník, 2013



The new Civil Code will establish a special legal concept of trust-like structures – the trust fund – and a new related property law, the so called the separate patrimony, into the Czech private law. The Czech Legislator has taken the normative regulation of trust in the Quebec Civil Code as the model for the legal regulation of the trust fund which is itself doctrinally based on the English trust. The author of this paper, recognising the theory and practise of this institute, understands and appreciates the intentions of the legislator in legally transplanting the English trust doctrine into the Czech legal order. However, as will be elaborated on further in this paper, the results of the process are less than satisfactory. The author of this paper deals first with the doctrinal incompatibility of common law and civil law and with the dual aspect of ownership in the common law. This discourse is necessary for the subsequent criticism of the separate patrimony and the related legal regulation of the trust fund. To this effect, the author pursues an analysis of a hypothetical unlawful transfer of property in the trust fund to a third party as well as contemplates the protection afforded to the beneficiaries. Based on these deliberations, the author of this paper subsequently discusses the alternative manners of transposition of the English trust into the Czech law, with a particular focus on the Italian approach by ratifying The Hague Convention on the Law Applicable to Trusts and on their Recognition. The crucial are conclusions drawn in the final part of the paper where the author, among others, considers whether there is any sense in the Czech Republic implementing the Quebec concept of trust, whether the Czech legislator even dealt in detail with the practical application of the theoretical concept of the separate patrimony and whether the chosen method of transposing the trust is the most suitable one. Further, the author of this paper questions the constitutional-compliance of the trust fund, the extent to which the trust fund will be used in the Czech Republic and whether the Czech legislator should not rather opt for the Italian method whilst transposing the English trust.


Key Words: trust fund, trust-like structures, trust, separate patrimony, duality of ownership


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