The Trust in Liechtenstein Law

Josef Bergt
2023

In the realm of Liechtenstein law, the trust pursuant to Art. 897 to Art. 932 of the Liechtenstein Persons and Companies Act(“PGR”) holds a distinctive position. A trust is established when a natural person or legal entity, known as the settlor, transfers assets to a trustee. The trustee then administers or uses these assets, referred to as the trust fund, in their own name as an independent legal owner for the benefit of one or more third parties, known as beneficiaries. It's important to note that a trust does not possess legal personality.

A trust that is set up for a period exceeding twelve months must either be registered in the Commercial Register within twelve months, or an attested copy of the founding deed must be deposited with the Office of Justice within the same timeframe.

The establishment of a trust requires a written agreement between the settlor and the trustee. However, a trust can also be created by a unilateral declaration of the settlor, which necessitates a written declaration of acceptance by the trustee. If no person or legal entity in Liechtenstein is appointed as trustee, a representative must be appointed.

The trust deed typically contains information about the settlor and the trustee, the name of the trust, the date of its establishment, the duration of the trust, the trust assets, and the position and powers of the settlor and the trustees. The trust assets include all assets designated for this purpose by the settlor or by law, including all assets acquired by the administration.

If the trustee acts in breach of the provisions set out in the trust deed or other relevant legal provisions, they shall be personally liable with all their assets to the settlor and, if a settlor no longer exists, to the beneficiary, in accordance with the principles of contract law. The trustee is also liable, subject to the right of recourse, for acts and omissions of authorized signatories, authorized representatives, and similar parties.

The trustee or trustees are obliged to draw up a special statement of assets of the trust fund annually and to provide information about the status of the trust at any time. They must archive the records and supporting documents for a period of at least 10 years.

Source: Factsheet AJU/ h70.039e.01

Executive Summary:

• A trust is established when a settlor transfers assets to a trustee, who then administers or uses these assets for the benefit of beneficiaries.
• A trust that is set up for a period exceeding twelve months must either be registered in the Commercial Register within twelve months, or an attested copy of the founding deed must be deposited with the Office of Justice within the same timeframe.
• The establishment of a trust requires a written agreement between the settlor and the trustee.
• The trust deed typically contains information about the settlor and the trustee, the name of the trust, the date of its establishment, the duration of the trust, the trust assets, and the position and powers of the settlor and the trustees.
• If the trustee acts in breach of the provisions set out in the trust deed or other relevant legal provisions, they shall be personally liable with all their assets to the settlor and, if a settlor no longer exists, to the beneficiary.
• The trustee or trustees are obliged to draw up a special statement of assets of the trust fund annually and to provide information about the status of the trust at any time. They must archive the records and supporting documents for a period of at least 10 years.