NORWAY Law and Practice Contributed by: Sicilie Tveøy, Lars Christensen, Ramborg Elvebakk and Karen Margrethe Bugge, Advokatfirmaet Hjort AS
Wealthy individuals sometimes establish charitable foundations – for example, donating a sum of money or a collection of art to a foundation whose main goal is to fund something, say, medical research or cultural causes. More commonly used in Norway, instead of trust, is the holding company with limited liability: families often create private limited companies to hold family investments, real estate or business interests. Even though it is not a trust, a holding company can serve similar goals – enabling consolidated management of assets, ease of transferring shares among family members, and continuity beyond the founder’s life. The ownership structure and rules are often set out in shareholders agreements, and wills give the heirs an obligation to enter into shareholders agreements as a condition for receiving inheritance in the shares. In recent years, the use of family offices has increased in Norway. Families often establish their own com - panies to manage and co-ordinate their wealth, investments and succession planning. While this is a modern and practical approach to estate planning, a family office is not a distinct legal structure but rather an organisational model tailored to the family’s needs. 3.2 Recognition of Trusts As stated above, Norwegian law does not recognise trusts as a legal concept. 3.3 Tax Considerations: Fiduciary or Beneficiary Designation Terms like “fiduciary” and “beneficiary” in the context of trusts do not have equivalents in Norwegian inherit - ance law. 3.4 Exercising Control Over Irrevocable Planning Vehicles When it comes to Norway, the relevant instrument is the stiftelse (foundation). In a foundation ( stiftelse ), once assets are donated, the founder legally cannot control the assets – the foundation’s board must fol - low the charter and the foundation law. Norwegian foundation law does allow the charter to be amended under certain conditions if original pur - poses become impossible or outdated, but founders
cannot retain powers to direct assets after the foun - dation is created. As Norway does not have trusts, flexibility is achieved through other legal means such as powers of attorney, family agreements, or simply retaining ownership until decision time. One notable development, which is used widely, is the concept of fremtidsfullmakt (enduring power of attorney). It is not an estate planning vehicle per se, but allows a person to appoint someone to handle their affairs if they become incapacitated. This gives some control as the appointed person can manage assets under the terms set by the grantor, and it can include instructions that mirror wishes for changing circumstances. 4. Family Business Planning 4.1 Asset Protection The most common asset protection strategies in Nor - way are: • prenuptial agreements with separate property deci - sions; • wills; • establishment of corporate structures; • appointment of guardians for legally incapacitated heirs; • enduring powers of attorney; and • insurance. The primary tool to protect assets from division in divorce is the marital property contract ( ektepakt ). Business owners who have established the business during marriage will often have an agreement that the business shares are their separate property, shield - ing them from a 50/50 value split claim by a spouse in divorce or death. Even though an heir or child has received assets from parents (especially family homes or businesses) in a separate property decision, it might be wise to also write a prenuptial agreement where the separate property is mentioned, so that there is notoriety about the provision by the parents between the spouses, as marriage contracts can be sent and stored by the register for marriage contracts.
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