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Case law in Israel - how to set up a trust to survive death
The International Family Offices Journal
Vol. 6 - Iss. 1 pp. 41–44
Sep 2021
Keeping an eye on trust law developments in Israel, Alon Kaplan and Meytal Liberman report on two recent cases, in the theme of "How to set up a trust to survive death". They begin by stating that under the Trust Law 1979 "there are two approaches to create a trust to survive the death of the settlor: to set up an inter vivos trust (a contract with the trustee or a trust deed signed before a notary as a Hekdesh); or to set up a testamentary trust". There is another law, however, that prohibits certain agreements about future inheritances. As the two cases are reported in some detail, the issue can get complicated. Alon and Meytal give a helpful summary: Creation of an inter-vivos trust (Hekdesh) by the execution of a trust deed before a notary. The settlor should then transfer the ownership in the assets to the trustee and by doing so be completely disconnected from them. If, however, this can't be done, then the settlor must make an irrevocable undertaking to grant the assets to the trustee and be solvent at the time they are transferred. Even so, there is always a risk that the undertaking would be contested. Creation of a testamentary trust (Hekdesh) by the execution of a valid will. The will must comply with all the requirements of making a valid will. However, there is always a risk that the terms of the trust eventually probated would be different as a result of the intervention by the Administrator General or the court.