GERMANY Law and Practice Contributed by: Tanja Schienke-Ohletz, Flick Gocke Schaumburg
If a trust is established under foreign law, the trustee, as the formal owner under the applicable foreign law, can hold and manage the assets (eg, German works of art); ownership is transferred to the trustee, who man - ages it in the interests of the beneficiaries. Under Ger - man law, however, it is not the trust as such, but the trustee as a natural or legal person who is entered as the owner in the land register or register. The recogni - tion of the trust and its effects is governed by German private international law. As a rule, the trust is subject to the law chosen by the settlor. In the absence of an express or implied choice of law, the law with which the trust has the closest connection is decisive. The chosen law governs the validity, interpretation, effects and administration of the trust as well as the rights and obligations of the parties involved.
If a person wanted to set up a structure similar to a trust under German law, they could consider perma - nent executorship in inheritance cases or even set up a foundation so that art is bundled in a legal form. In the case of permanent executorship, estate assets are permanently administered by a person on behalf of the heirs, thereby also protecting the assets. However, structuring via a foundation is more secure because the foundation is a separate entity and foundations are also subject to foundation supervision. They can - not be dissolved, which can be particularly interesting for works of art or art collections that are to be pro - tected from sale or where fragmentation of the assets is undesirable.
56 CHAMBERS.COM
Powered by FlippingBook