Cap. 16 Art. 958LTrusts and applicable rules.

(1) Property under trusts shall be regulated by the special law on trusts and to the extent applicable, the rules of this Code relating to trusts.

(2) (a) Transactions relating to property including -

(i) the settlement of property under trusts, even when effected by unilateral declaration or resulting from a judgement or order of a court;

(ii) the distribution, application, or advancement of property by a trustee to a beneficiary;

(iii) the reversion of property to a settlor or his estate when a trust fails or is terminated;

(iv) the assignment, vesting or transfer of property under trusts from a trustee to another trustee under the same trusts, shall be subject to the special laws relating to trusts and their effects when such transactions arise by operation of law or are carried out in the form and manner required by applicable law.

(b) When such transactions are intended to transfer the ownership or other rights to or in property from one person to another, such transactions shall comply with all applicable requirements for the transfer of ownership of such property, including the provisions of article 996 when applicable, and when so carried out shall -

(i) be effective modes of transfer of ownership or other rights to or in such property;

(ii) result in the creation or termination of legally enforceable interests in or to such property in favour of such persons as provided by the special laws relating to trusts; and

(iii) be operative against third parties.

(c) The sole consideration for the validity of such transactions may be the imposition or assumption, the performance, or the termination, as the case may be, of legally enforceable obligations on or by a trustee in relation to such property.

(3) A trustee may validly dispose of and transfer trust property to third parties notwithstanding any right of reserved portion arising out of the application of articles 615 to 653 and the other provisions of this Code relating to reduction of trust property.

(4) In any case where, after the death of the settlor, the trustee is formally notified of a claim for the reserved portion in circumstances where trust property is to be sold, the trustee shall hold on trust for the benefit of any claimant of such right a sum in money based on the net transfer value of the property at the time of transfer until the claim for the reserved portion is determined or otherwise lapses.

(5) If trust property subject to a claim for the reserved portion or, where it has been sold, the proceeds thereof, have already been distributed to any beneficiary, the person entitled to the reserved portion claim may be made against such beneficiary as though he were an heir, legatee or donee as the case may be, and if there remains any property under such trusts, proportionately between the trust property and the beneficiary.

(6) The trustee’s obligation to retain the value as stated in sub-

article (4) shall operate for a peremptory period of five years from the date of death of the This shall not prejudice the right of decujus.

any claimant with respect to other property forming part of the inheritance but not settled in trust.