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The Hague Convention of 1 July 1985 establishes that the law chosen in the trust deed governs the validity of the trust, its interpretation, its effects, and the administration of the trust.
The question of creditor protection with respect to assets segregated in a trust has reached the Supreme Court of Cassation. According to the trust regulations – drawn up in accordance with Jersey law – the Royal Court had exclusive jurisdiction over all matters concerning the trust, with the consequent preclusion of Italian courts from assessing its validity or effectiveness.
The Joint Sections of the Supreme Court, in Order No. 26471 of 1 October 2025, ruled otherwise.
The reservation of jurisdiction applies between the settlor, trustee, and beneficiaries, but is not enforceable against third parties acting to protect their credit rights against the trust.
The Court refers to Article 15 of the Hague Convention (1 July 1985), which expressly protects creditors and third parties acting in good faith: enforceability against third parties is established by national law, not by the law chosen by the settlor. The rules protecting the settlor's creditors – such as Article 2901 of the Civil Code on revocation – cannot be circumvented by the trust regulations through a "tailor-made" jurisdiction clause.
A clear principle for those involved in asset planning: the freedom to set up a trust in Italy governed by foreign law cannot prevent Italian law from applying to contributions to the trust with regard to creditors' initiatives. The trust remains subject to Italian law when it pursues evasive or fraudulent purposes.
Trust estero e riserva di giurisdizione: i limiti (molto concreti) della libertà di scelta
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
