How does contract law work in a trust in Switzerland, and what are the essential contractual clauses to include?
Contract law also applies to trusts in Switzerland, as trustees are responsible for managing the trust assets and must sign contracts on behalf of the trust. The essential contractual clauses to include in trust contracts depend on the type of trust and its specific objectives. However, here are some of the most common clauses:
- Purpose of the trust: This clause describes the trust’s objective and the activities the trustee is authorized to undertake.
- Identification of parties: This clause must clearly identify the settlor, beneficiaries, and trustee.
- Powers of the trustee: This clause sets out the trustee’s powers and responsibilities, including managing the trust assets, distributing income and capital to beneficiaries, and making investment decisions.
- Duration of the trust: This clause specifies the duration of the trust and the conditions for its termination.
- Amendment of the trust: This clause describes the circumstances under which the trust can be amended and how amendments can be made.
- Applicable laws and competent jurisdiction: This clause specifies the laws applicable to the trust and the competent jurisdiction in case of disputes.
It is important to consult a lawyer specialized in trust law to draft a trust contract that reflects the settlor’s wishes and protects the rights of the beneficiaries. Trust law specialists can help evaluate available options and develop trust contracts that reflect the settlor’s wishes.