The right to property and the right of trust property (on the way to recodification of the civil legislation of Ukraine)

The article examines the socio-economic background of the introduction of trust and other trust-like structures in the legislation of Ukraine. As a result of considering the history of the origin of the institution of trust and a systematic analysis of the provisions of domestic civil legislation, reasoned conclusions were formulated on the issues studied. The given short historical retrospective of attempts to introduce trust property and trust-like constructions into the legislation of Ukraine allows to state that they almost always led to "unworthy", negative social, financial and economic results. The question of the purpose of ignoring one's own negative experience of implementing trust-like structures in the domestic civil legislation is reasonable. Isn't it better, remembering the functions of the science of civil law, to draw the right conclusions from this experience and rely on them in their further law-making activities?! The article draws attention to the experience of using the construction of trust and trust property in the Anglo-American legal system (which, unlike ours, is calculated for centuries), and establishes that this legal institution in addition to legitimate purposes (which are charity, preservation of property from waste, formation of pension funds, etc.), is extremely popular as a means of achieving illegal and negative social results (for example, such as tax evasion, abuse of tax rates, concealment of property and income, legalization of property obtained as a result of committing crime, concealment of illegal funding of political parties and their leaders, etc.). It is obvious that the blind borrowing of someone else for the domestic legal system and the archaic institution of trust property will lead to the penetration into our legal reality of all its inherent shortcomings. Law is a regulator of social relations (and economic in particular). In this case, public relations are primary, and law - secondary. Only those civil law institutions properly perform the regulatory function that determines their existence, which are in demand throughout the history of economic relations and necessary for society as a prerequisite for its normal existence and development. If social relations have not developed, then is there a need to create "artificial" legal institutions or to borrow legal structures generated in the bosom of other legal systems to regulate relations that have developed in the age of feudalism?! These circumstances must be taken into account in any attempts to improve the acts of civil law, and in recodification, including. The question of the sufficiency (or insufficiency) of the socio-economic base for the introduction of the institution of trust in Ukraine should be categorized as rhetorical. Trust construction is just a legal tool. And the result of its application will depend on the quality of regulatory "material" proposed by the legislator (and he, in turn, representatives of the doctrine of civil law), on establishing the place of this legal institution in the civil law system, and creating legal barriers that minimize it use to achieve a socially negative effect.

Trust-like Constructions in the Law of Ukraine

At the moment, two trust-like constructions co-exist in the law of Ukraine – the institution of property management and trust property. The article analyses the positions of well-known Ukrainian lawyers on the place of these legal structures in the civil law of Ukraine, as well as possible ways in which they might be further development. The author defines the concepts and researches the features of the institution of property management and trust property, establishes their common and distinctive features, and also emphasises the fundamental difference between it and the institution of trust, which exists in the common law. Particular attention in the article is devoted to defining the concept and specifics of securities management as a specific subject of civil law. The definition of the term ‘securities management contract’ and its characteristics are analysed.

19. The equitable liability of strangers to the trust

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. This chapter shows how a stranger to the trust may be threatened with personal equitable liability. It explains the rationale behind equitable liability for ‘knowing receipt’ of trust property, considers the distinction between ‘knowing receipt’ and ‘inconsistent dealing’, examines the nature of a stranger’s liability for dishonest assistance in (or procurement of) a breach of trust and looks at possible reforms of the law in this area. The chapter also discusses how liability of strangers differs from tracing, trusteeship de son tort, the four requirements for ‘dishonest assistance’ (existence of a trust, breach of the trust, assistance and dishonesty), the relationship between knowledge and dishonesty in cases of dishonest assistance and whether accessory liability should be a common law tort.

18. Tracing

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. Trustees have personal liability in an action for compensation or account. If the action proves worthless in practice because the trustees are impecunious or have been declared bankrupt, and hence cannot repay trust monies to the fund, the beneficiaries may be able to trace the value of their trust property into bank accounts and into assets that have been bought with the trust property. It is the value of the trust property, not the precise item of the property itself, which is sought or traced in most cases. Tracing is a process that gives rise to the ultimate remedy of recovering misapplied money or property. This chapter examines tracing and the limits to common law tracing, the distinction between proprietary remedies and personal remedies, and how the rules for tracing in equity may be applied to unmixed funds, mixed funds and assets purchased with such funds. It also discusses the artificiality of the distinction between common law and equitable tracing rules, defences to the common law restitutionary claim and advantages of proprietary rights.

The nature of beneficiaries’ rights—can there be a trust to observe a licence over property?

This article considers the nature of a trust beneficiary’s rights. Specifically, it challenges a body of academic opinion that suggests it is not possible for a trust to exist where the only benefit conferred by the trust’s terms on its beneficiary is that the trustee must observe a licence for the beneficiary to use the trust property, given that a licence is only a personal right not a property interest.