1. How must an English trust be looked at under the rules of Netherlands conflict of laws? In the Netherlands there are no statutary provisions, hardly any opinion of a learned author and only one decision of the Supreme Court (in a tax case) having a direct bearing upon this question. However, in a short article like the following one only the main questions which may arise can be summary treated.
2. Formal requirements. If a trust has been created in England either by a domiciled or not domiciled Englishman, or by an alien the rule locus regit actum will be applicable. In case of a trust created elsewhere under a Will and either by a domiciled or not domiciled Englishman or by somebody who is not an Englisman, under the rules of Netherlands conflict of laws a Netherlands Court will be authorized to apply either the rule locus regit actum or English law. An exception has to be made however in so far as article 992 of the Netherlands civil code applies to Wills made by persons of the Netherlands nationality.
As to deeds the rule locus regit actum will be applicable, but if in the deed English law has been declared applicable, a Netherlands Court will also be free to apply English law.
If a deed containing the provision that English law shall be applied has been executed in England by one of the undersigned only, a Netherlands court will be bound under Netherlands conflict of laws to decide according to English law.
3. Capacity. Under the rules of Netherlands conflict of laws matters regarding capacity will have to be decided according to the laws of the nationality of the acting party. But a person of Netherlands nationality, acting in the Netherlands will be free to create a trust under English law, restrictions only to be made as to the requirements for the transfer of movables and immovables, as to “legitimate portions” of heirs-at law and as to the rules regarding fideicommissa.
4. Other requirements. As to the essential conditions for a trust created under English law, the said law only will be decisive; domicil or nationality of the settlor, situs of the trustfund and the place of the trust-administration will not considered to be relevant.
5. Not a contract. In my opinion it would be wrong to consider that a trust created by deed is a form of contract under the rules of Netherlands conflict of laws, the act of creating a trust and the agreement of the trustee(s) being “unilateral” acts. The main feature of a trust is the appropriation of some property to some object for a definite end.
6. Legal and equitable ownerships. As Netherlands law does not know of “dual ownership” the most difficult question under Netherlands conflict of laws is who is to be considered the “owner”, — in the Netherlands sense of the term —, the trustee(s) or the beneficiary. Courts decisions and opinions of learned authors are scarce and contradictory and I do not know of any authority dealing with all relevant aspects of the problem.
I came to the conclusion that, in an express trust, the trustee is to be considered a fiduciary owner, the beneficiaries having a ius in rem as to the trustfund.
In a simple, bare or passive trust however the trustee will be treated, under the rules of Netherlands conflict of laws as an administrator. In a charity the trustee will be regarded as a “qualified” owner under the duties put upon him in the trust instrument.
In the case which came before the Supreme Court the only holding was that a beneficiary having a life interest was not an “owner” under the Netherlands Tax on Property Act, but nothing was decided about the rights of the trustees or of other beneficiaries (having contingent or remote contingent interests).
7. Ordre public. Certain rules of Netherlands municipal law relating to the transfer of immovables, fideicommissa or “legitimate portions” of heirs-at-law can have the effect that, by way of principles of “ordre public” (public policy) the applicability of English law will be limited to some extent.