| Testamentary trust, established by the principal(testator) alive through the testament, transfers partly or the whole assets to the trustee for the benefit of the beneficiary, which ensure the beneficiary will enjoy the benefits with trustee managing and distributing the trust according to the purposes of trust. The function of transfer and management of property will flexibly meet the purposes of principal and protect the beneficiaries’ rights better. Therefore, this system will effectively achieve the special purposes which cannot be reached under the existing inheritance system. Briefly, the existing inherence system cannot suite the reality. With the development of economic globalization, the world is embracing the law interaction country by country. Though the testamentary trust system is initially established in the Anglo-American legal system countries, its effective function is attracting the world`s attention. With the development in socio-economic and the transfer of perception, people are becoming accepting the testamentary trust system with special function. For example, the testamentary trust system leads a trendy in Japan and Taiwan Area which also belong to civil law countries. However, there are a lot of problems need to be resolved in the process of developing the testamentary trust in China. Specially, there is no sufficient regulations to protect the rights of the beneficiaries.Both the origination and recent development prove that the only purpose of testamentary trust is for protecting beneficiary and the whole system is around beneficiary interest. Dual ownership in British and the United States(Clients of Bri-Ame System countries will lost the ownership of the trust property,the trustee will own this property in common law and the beneficial will own this in equity)collides with the principal of one thing one right in china(civil law system) which will never be abandoned. Therefore in the Trust Law, the law makers replace the word “transfer” with “commission” to avoid the dilemma of declaring ownership which will cause confusion on independent of property, the rights and obligations of trust litigants and the nature of beneficiary interest. As a special trust, all these problems mentioned before appear in testamentary trust either. In addition, the testamentary trust is an unilateral obligation, and the principal has passed away when the trust is in force. The absent of principal and rights of principal endowed by law make the testamentary trust lack of regulation, which contributes to damaging beneficial interest by trustee’s abuse of rights.The whole paper is made up by three parts. The first part is the over review of beneficial interest. The paper compares Bri-Ame System with civil law system to analyze advantages respectively. Property theory, claims theory and compromise theory all belonging to beneficial interest come from and are on the basis of the specific provisions, which do not extend the scope. All three theories classified by scholars’ emphasis can be supported by corresponding evidence. However the beneficial interest in civil law countries are not regulated by domestic laws, which is, instead, researched by imagination and referring to Bri-Ame system. In addition, this part presents the trust interest reception right, trust affairs supervision, and right of relief for violation trust.The second part focuses on the situation and weakness of testamentary trust in China. At first, this paper will analyze trust from person, property and the factors connecting people and property. Then this paper will show five problems in detail. Firstly, the content of beneficial right is not sufficient, and the compensation for damages in relief rights is not clear, the revocation is not available for third person, and the scope for bona fides third party is too wide. Secondly, the obligation for trustee is too abstraction to carry out. The obligation for trustee when they violate the law is too obscure and has no effect for people asking for help. Thirdly, the testamentary publicity system damage beneficiary interest indirectly. Without publicity system, there is no effective method to identify the trading party with trustee as a malicious third party. Furthermore, beneficiary revocation requiry will not influence malicious third party when the trustee damaging appears. Then, without certainty regulation of principal and potential regulation of beneficiary, the trustee is more likely to abuse rights to damage beneficiary interest. At last, the fact that principal has passed away makes beneficiaries have to shoulder all risks on their own.The third part will talk about the approaches available for testamentary protection. This part will be separated into three sections, establishing testamentary risk prevention mechanism, direct and indirect beneficiary interest protection approaches, and after event beneficiary interest violation relief mechanism. In the before event mechanism, this paper pays attention to the publicity system, declaring the independent of trust, influence of information disclosure system based on rights to know for beneficiary. In the protection approaches, the paper insists direct protection rights for trustee and indirect obligation for protecting beneficiary. At last, the paper puts forward corresponding suggestions and makes analysis on the three relief rights beneficiary owns, including reconversion right, request of compensation and revocation right.Most scholars analyze this subject from the perspective of indirect trustee regulation realizing beneficiary protection indirectly. In this paper, the writer tries to analyze from the perspective of beneficiary. Through the means of comparing the Bri-Ame system and civil law system, basing on trust principles, combing with trustee obligation, information disclosure and testamentary trust publicity system, the paper concludes the assumption of establishing our testamentary beneficiary interest protection system. Obviously, this system must be carried out by risk prevention mechanism and relief system, direct and indirect protection approaches. This paper also puts forward that the independenc of property will exclude resoursing from creditors of trustee. In addition, the testamentary publicity system will help beneficiary identify bona fide third party. Lastly, the paper puts forward that setting testamentary supervisor will strengthen supervise, information disclosure system will protect beneficiary rights, and will wipe out the shortcoming of asymmetric information between trustee and beneficiary. In the testamentary trust, the law should endow beneficiary rights to declare the duty of loyalty of trustee, which in all will protect their own interest. In the after event system, our trust law should expand the scope of compensation, which will make beneficiary available to identify direct and indirect damages when trustee violates. What`s more, the law should endow beneficiary right of recourse against trustee and third party. However, the bona fide assignee assumes no liability for damage when the property is consumed... |
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