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The Inter Vivos Trust as an Estate Planning Instrument - Chapter 7 - 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 In the previous chapters, we examined the types of trusts that may be established under the Trust Law and their modes of operation. This chapter focuses on the Israeli inter vivos trust as an estate planning instrument. In other words, this chapter will look into the special characteristics of an inter vivos trust that is used specifically for the purpose of transferring assets to the next generation.
7.1. FORM
As mentioned in previous chapters, a private inter vivos trust can be created either through a contract or a deed of Endowment executed before a notary. The choice between these two options has great implications on the validity of the trust at the time of death of the settlor, as can be concluded from the Anonymous case.
In the Anonymous case, The deceased executed several wills and, prior to his passing, added two acquaintances - – the Applicants - – as joint owners of his bank account. Relying upon the wills, the Applicants asserted that the purpose of adding them to the account was to ensure the commemoration of the deceased and his late wife after his death.
The Family Court, sitting as the court of first instance, invalidated the deceased’s wills on the grounds of various defects and further revoked the addition of the Applicants as joint account holders, citing procedural irregularities and undue influence.
The Applicants appealed to the Supreme Court and argued that by designating them as joint account holders, the deceased had in effect established an oral inter vivos trust, which should be recognized by the court as an endowment under section 17(C) of the Trust Law.
While the Supreme Court indeed acknowledged the possibility of establishing an oral inter vivos trust - – an “implied trust” - – by way of an oral contract, this would not be sufficient to accept the Applicants’ argument: Firstly, the Supreme Court did not intervene in the factual findings for the court of first instance, which determine that a binding contract has not been entered into between the parties due to lack intention to be bound.
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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