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Private International Law: Recognition of Foreign Trusts in Israel - Chapter 20 - Trusts and Estate Planning in Israel - Second Edition
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This chapter is from Trusts and Estate Planning in Israel, Second Edition
PAGE PREVIEW The trust is a well-established legal structure, recognized in many jurisdictions worldwide. Consequently, trusts may operate in jurisdictions other than the one under which they were established. This cross-border operation raises questions of private international law, particularly whether a given trust structure is permitted to act and hold assets in a specific jurisdiction. The importance of this question underlies the Convention on the Law Applicable to Trusts and on their Recognition. As its name suggests, the Convention aims to create a unified standard for the cross-border operation of trust structures and facilitate their recognition by other jurisdictions. Inter alia, the Convention defines what constitutes a “trust” and provides that the law applicable to a trust is the law chosen by the settlor, or the law applicable in the jurisdiction most closely connected to the trust. Most significantly, the Convention further provides that such trusts are automatically recognized as valid by all signatory states. Israel, however, is not a signatory to the Convention. Accordingly, the recognition of foreign trust structures in Israel must be determined solely under Israeli domestic law. Four laws are good sources for examining the question of the recognition of foreign trusts in Israel: The Law for Taxation of Trusts, the Income Tax Ordinance, the Real Property Law and the Succession Law. The Taxation of Trusts Law contains definitions that enlarge the scope of the law to encompass the taxation of foreign trusts, thus recognizing their existence and validity. This law even goes beyond referring to common law trusts and includes legal structures that may be termed “continental trusts” – those fiduciary and trust-like entities established in countries like Liechtenstein (the Foundation, Establishment and the Trust reg.), the Panama foundation and other similar structures.
Dr. Alon Kaplan, Advocate & Notary, is a member of the Israel Bar and was admitted as a member of the New York and Frankfurt Bars. He is the President and founder of the Society of Trust and Estate Practitioners “STEP Israel”. Academically speaking, he has a Ph.D. from Zurich University in Switzerland and an LL.B. and LL.M. from the Hebrew University of Jerusalem. Dr. Kaplan maintains a direct and close relationship with academia, and he was a lecturer on trusts in the Academic Management College, Reichman University, and the Law Faculty of Tel Aviv University, where he taught trust courses for LL.M. students. Dr. Kaplan is a popular lecturer on trusts in Israel and abroad. He constructed the academic program for the Trusts Diploma of STEP in Israel. Throughout his professional career, he has written numerous professional articles in legal journals, on matters of trusts, intergenerational asset transfers and selected commercial law topics such as agent and distributor laws, a topic which he researched for his LL.M. thesis. Dr. Kaplan has been a regular contributor of articles to Trusts & Trustees by Oxford University Press. He has written and edited numerous professional books, among these on doing business in Israel, on trusts in Israel, and on international trusts laws. His book, Trusts and Estate Planning in Israel, is a professional and comprehensive guidebook for practitioners in this area in Israel. Another important book in English is Trusts in Prime Jurisdictions, fifth edition, 2020 which reviews trusts in various jurisdictions by 19 authors from various jurisdictions. In December 2020 he was the co-editor of the book, Life Cycle of a Family Business, published in London. Meytal Liberman, Advocate and Notary, TEP, advises private clients in Israel and internationally on trusts and estate planning. Her services include legal structuring for the long-term holding, ownership, and management of assets, addressing legal incapacity, division of marital property, wills, and trusts. She has practiced in this field since 2012, combining legal work, academic study, and active participation in professional organizations, publications, lectures, and continuing legal education.
Ms. Liberman was admitted to the Israel Bar in 2013 and licensed as a notary in 2024. She holds an LL.B. from Bar Ilan University (2012) and an LL.M. in Commercial Law from Tel Aviv University (2015). She is a full member of STEP, having earned a Diploma in International Trust Management following two years of study. Since 2018, she has been authorized by the Administrator General and the Israel Bar Association to draft and execute legal instruments for future incapacity planning, including the Enduring Power of Attorney, Expression of Wishes Document, and Preliminary Instructions for the Appointment of a Guardian. Her writing includes chapters in Asia-Pacific Trusts Law, Volume 2 (Bloomsbury, 2022), Trusts in Prime Jurisdictions (5th ed., Globe Law and Business, 2019), and Trust in Israel: Theory and Practice (2017, in Hebrew). Her work has also appeared in Trusts & Trustees, The International Family Office Journal, and STEP Journal. She lectures regularly at seminars and conferences, including events hosted by the Israel Bar Association and STEP.
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