Application of the Hague Trust Convention to a Liechtenstein trust company and qualification of the successor regulation of a beneficiary clause of a trust company

Facts

Parties: The heirs of the deceased G.A. (A.A., B.A., C.A., D.D., E.D., F.D.)

Courts: District Court Solothurn-Lebern, Cantonal Court of Solothurn, Federal Supreme Court

Main issue: Dispute over the affiliation of assets of a Liechtenstein trust company (I. Trust Reg.) to the estate of the deceased G.A.

Background: G.A. died in 2013, leaving his children and grandchildren as heirs. A settlement was reached whereby D.D., E.D., and F.D. waived their inheritance shares in exchange for compensation. It was later discovered that G.A. had been the beneficiary of the I. Trust Reg. until his death, which managed assets worth CHF 1,368,797.34. After his death, B.A. and C.A. were appointed as beneficiaries.

Claim: D.D., E.D., and F.D. sought a declaration that the assets of the I. Trust Reg. belonged to the estate and a distribution of these assets. The District Court Solothurn-Lebern dismissed the claim, the Cantonal Court of Solothurn partially upheld the appeal, and found that the assets belonged to the estate. The appellants (A.A., B.A., C.A.) filed an appeal with the Federal Supreme Court.

Considerations

The Federal Supreme Court ruled that the Liechtenstein trust company I. Trust Reg. does not fall under the Hague Trust Convention, as it is asset- and legally capable and does not exhibit the characteristics of a trust as defined by the Convention. The trust company is therefore subject to Liechtenstein law and is recognized in Switzerland, provided it complies with the publicity and registration requirements there.

The assets of the I. Trust Reg. did not fall into the estate of the deceased, as he had irrevocably waived all rights to the trust company and the trust assets during his lifetime. The transfer of assets to the trust company was therefore valid and excluded these assets from the estate of the deceased. There was no "sham trust" or piercing of the corporate veil, as the deceased did not retain control over the trust assets and the trust company was not comparable to a single-person corporation.

The beneficiary clause of the trust company, which appointed B.A. and C.A.…