On Testamentary Trust

Along with China’s economic development and family and personal wealth increasement,the economic foundation of testamentary trust has been laid in China. In April2001, the Standing Committee of the National People’s Congress adopted the Law of Trust of PRC, which is the first legislation that has been adopted in the Mainland to adjust trust activities and lays foundations in legal grounds for the development of Testamentary Trust in China. However,the law mainly focuses on regulations concerning business trust, the specific regulations concerning the Testamentary Trust have not been indicated, even in some cases, it constitutes conflict with the Testamentary Trust. The Testamentary Trust system has drawn increasing attention in dealing with legacy problems due to the reform of modernization process in China. Under this context, it is becoming especially urgent and necessary to establish the Testamentary Trust system in China.A complete and defined legal system must be set up firstly, which is exactly the main subject of this paper (also includes the Testamentary Trust system in China), before starting the Testamentary Trust cause in China, so in order to set up the above legal system, a study regarding the concept, legal feature, different subjects and assets of the Testamentary Trust, as well as elements that constitute the Testamentary Trust and make it effective, the monitoring and alteration, termination of Testamentary Trust shall be carried out.This paper is separated into four parts:Part I:Overview of the Testamentary Trust. The Testamentary Trust system derives from systems of UK and USA. In this part, the source, concept and legal feature of the Testamentary Trust system will be introduced principally, the Testamentary Trust is also characterized by the uniqueness other than general features of trust as the Testamentary Trust represents will freedom and estate disposal freedom and the Testamentary Trust is a kind of open inheritance.Part II:Subject and Object in the Testamentary Trust. Subject in the Testamentary Trust means trustor, trustee and beneficiary of the Testamentary Trust, and object means the estate of Testamentary Trust. This part mainly concerns on qualification of trustor, qualification and responsibility of trustee, election and duty termination of trustee, qualification, rights and duties of beneficiary and the estate of Testamentary Trust.Part Ⅲ:the Working of Testamentary Trust system. This part compares the different regulations between the system of UK, USA and the Mainland system that may apply to the Testamentary Trust by ways of comparative method, including the set-up condition of the Testamentary Trust, the elements that constitute the Testamentary Trust and make it effective, alteration, monitoring of the Testamentary Trust and termination cause and legal outcome of the Testamentary Trust.Part Ⅳ:the Establishment of the Testamentary Trust system in China. This part purports to put forward suggestions with respect to the establishment of legal framework of the Testamentary Trust system and to some key problems.