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2017 Jotwell: J. Things We Like 1 (2017)
Trusts as Ownerless Property

handle is hein.journals/jotwell2017 and id is 318 raw text is: 
The Journal of Things We Like (Lots)

Trusts as Ownerless Property

Author  : Sjef Van Erp

Date  : July 4, 2017

Alexandra  Popovici, Trust in Quebec and Czech Law: Autonomous   Patrimonies?, 24 Eur. Rev. Private L. 6 (2016).

When  comparing  common   law and civil law in the area of property, the trust is always presented as a legal institution of
ownership  typical for the common law and absent in the civil law. The trust, then, represents one of the major
differences between these two legal traditions. While such a formal differentiation might be justifiable, the civil law
indeed, like the common law, often generates institutions with some of the attributes of the common law trust but with
varying characterizations of interest.

Alexandra  Popovici's article discusses the unique characteristics of instruments with trust-like qualities in civil systems,
and she reveals the drafting history around the Qu6bec Civil Code treatment of the issue.

Since the French Revolution (1789), and the ensuing abolition of the feudal system with its ownership of the feudal
lord (dominium directum) and ownership of the person in possession (dominium utile), the civil law made a
rigorous choice for a unified approach to ownership.

The  French Declaration of Human and  Civic Rights of 26 August 1789 stated in article 17 that the right to property is
inviolable and sacred. This was reflected in article 544 of the French Civil Code, which defines ownership as the right
to enjoy and dispose of things in the most absolute manner, provided they are not used in a way prohibited by statutes
or regulations.' The consequence of this approach is that an object can only have one subject as owner (although
several subjects can be co-owners, but they then share full ownership rights). All others who claim property
entitlements are seen as having only a limited property right.

In the case of a trust, however, the trustee is entitled (owner) at common law and the beneficiary has an entitlement
(ownership) in equity.

From  a civil law perspective, this is a - forbidden - split ownership. Still, civil lawyers also accept the great advantages
of trust law and have devised ways to achieve them: permitting someone to manage property (which is separate from
the manager's other property) for the benefit of another, who is also seen as having a property entitlement. In order
not to go against the basic premise of the unity of ownership, the solution chosen was that the trustee concluded a
contract with either the settlor or the beneficiary under which the trustee agreed to use her property rights only for
the benefit of the beneficiary. The beneficiary, however, is not given any property right.

Civil law systems differ in their approach as to how far they are willing to protect the beneficiary.2 Qu6bec, a leading
civil law jurisdiction in North America, has chosen its own, rather fascinating, solution. The trust property is owned by
no one, so the unitary concept of ownership is not violated, whereas at the same time both trustee and beneficiary
seem  to exercise what looks like property rights. In other words, exercise of property rights is separated from
entitlement to property rights.

The Qu6bec   Civil Code (Article 1261) states that (t)he trust patrimony, consisting of the property transferred in trust,
constitutes a patrimony by appropriation, autonomous and distinct from that of the settlor, trustee or beneficiary and in
which none  of them has any real right. In other words: according to Qu6bec law, no one owns the trust property. It
is a patrimony (in civil law the term for the whole of a person's assets and debts) managed by the trustee as a non-
owner. Also, the beneficiaries are non-owners.


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