Ronald Sokol recently published French Fear of Trusts and The Law Of 29 July 2011, 2026. Provided below is the introduction:
No legal tool is more useful to American lawyers than the trust, be it revocable, irrevocable, inter vivos, or testamentary. When asked to name the greatest achievement of English law, the renowned nineteenth century legal historian Frederick Maitland replied, “the development from century to century of the trust idea.” However useful to the American lawyer, French judges tremble before it; French tax collectors call it disreputable, possibly criminal; French lawyers fail to understand it; and, in 2011, French legislators sought to tame it by enacting a new law to address trusts, the 2011 law.
For the French legal mind, a trust is the creation of an evil person to be viewed with utmost suspicion. When the 2011 law was attacked for breach of privacy because it required a National Registry of Trusts that was open to public inspection, France’s constitutional court explained that the legislative intent for the law was to pry open the trust so as to avoid its use for tax evasion, money laundering, and fraud. As one French commentator wrote of the new law, the French clearly set out to destroy the use of the trust as a legal vehicle.
This Article will explain why France has historically feared the trust. It also will discuss what the 2011 law attempts to do and suggest how practitioners cope with it.