Trust Regulation In The Czech Republic: The Model Law For Introduction Of The Trust Instrument In The Republic Of Latvia?

• Author: Janis Grasis
• Pages: 46-54

European Integration - Realities and Perspectives. Proceedings 2016

46

Trust Regulation in the Czech Republic: the Model Law for Introduction of

the Trust Instrument in the Republic of Latvia?

Janis Grasis1

Abstract: In the last decades, thanks to the process of globalization, there is the diversification of forms and

kinds of the economic relations. Therefore the trust instrument is used more and more in the countries where

before it was practically unknown legal instrument. The author has defended dissertation paper “The Essence

of Trusts, its Recognition and Legal Regulation in the Roman – German Law System Countries and Possible

Introduction in Latvia” on September 12, 2008. In this dissertation paper it was advised to introduce trust

instrument in the Republic of Latvia I order to improve the existing regulation in Latvia; draft law on trusts

was prepared. The Czech Republic had introduced trust instrument from January 1 2014. This article will be

devoted to the comparative analysis of the Czech regulation on trusts; therefore it is a very important both

from academic and practical point of view. Till now there are a few researches on this theme. The survey and

comparative analysis are the main methods used in the present article. Based on the comparative analysis it is

recommended to use regulation of the Czech Republic and Province of Quebec in order to draft similar

legislation in the Republic of Latvia. The present research is a very topical for the academics, Me mbers of the

Saeima (Latvian Parliament), practitioners in the financial and legal field. This is unique research on

comparative basis, using Civil Code of the Czech Republic and Province of Quebec, the Principles of

European Trust Law , the Hague Convention on the Law Applicable to Trusts and on their Recognition and

existing regulation and prepared draft legislation on trusts of the Republic of Latvia.

Keywords: trust; Civil Code of Quebec, Civil Code of Czech Republic; Hague convention; Principles of

European Trust Law.

Introduction

The trust is one of the most popular legal institutions for wealth management in Common law

jurisdictions. In recent decades and years there has been a significant burgeoning of interest in the

reception of the trust in civil law jurisdictions, which have fuelled enthusiasm in the comparative study

of trusts around the world (Lupoi, 2000; Hayton, 2010). The trust law is a legal mechanism by which

English law recognizes and enforces a separation between the legal ownership of property and the

right to enjoy the benefits of that property. When a trust has been created, the trustee holds legal title

to the property, but the beneficial entitlement to the property rests in the hands of the trust

beneficiaries (Cane & Conaghan, 2008). Probably the declaration by the M.S. Amoss that “English

trust are spread throughout like eggs of the Cuckoo in the Continental law countries” (Amos, 1937) is

exaggerated, however this expression has a truth. Also in the law systems, which is not based on the

English common law and equity, there are law instruments by its essence similar to the Common law

trust.

1Associated Professor, PhD, BA School of Business and Finance, Latvia, Address: 1 61 Valdemara Str., Riga, Latvia, LV -

1013; Tel.: +371 67387317, fax: +371 67320620, Corresponding author: janis.grasis@ba.lv.