Immovable property and the law of trusts : some issues

Abstract

The introduction of a new concept in any legal system brings about inevitable consequences and effects on the previous legal framework. In fact, when Trust law was introduced in our law in 2004, various laws had to be amended so that this Common Law concept would not exist in conflict with our Civil Law system. This thesis will not, however, analyse the compatibility or otherwise of the trust with the Maltese Civil Law system, since such an exercise would be futile and has somewhat been exhausted. This thesis represents an attempt to explore the inherent liaison between immovable property and the law of trusts. I started off by illustrating an example of a trust in order to be able to look at its different aspects to see which of them are essential to the idea of a trust. The first chapter examines the nature of trust. I went through the definition of trust and how this innovative institute was introduced in Maltese law. The second chapter then discusses the impact which the new Trust law left on Maltese legislation. I sought to identify several characteristics that differentiate the trust institute from other legal institutes such as contract, deposit, mandate and so forth. The third chapter deals with 'inter vivos' trusts, namely trusts that are constituted during one's lifetime. The discussion in this chapter centers on these living trusts, particularly when the issue of such trust is a transfer of immovable property. The following chapter then deals with 'causa mortis' trusts, namely those trusts that are created by the settlor in his or her last valid will and which become effective upon the decease of the testator. In these two chapters I delineated the meticulous procedures a notary should follow when setting up such a trust. The fifth chapter then looks at the degree of formality which our law requires in the constitution of a trust. This chapter reflects the position under Maltese law with respect to the mentioned issues after that the Trusts and Trustees Act and other Laws were amended by virtue of Act XIII of 2004, which amendments were intended to provide for a notarial procedure for the creation of trusts in certain circumstances. Lastly, I dedicated the sixth chapter to fiscal matters, given that the transfer of certain assets such as immovable property still incur tax and are not exempt from it because of the institution of trust.