Trusts between Italian and Swiss law

The Hague Convention on both sides of the border

Neither Italy nor Switzerland has a domestic law of trusts in the common law sense. Both recognize trusts governed by foreign law under the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. Italy was one of the first states to ratify the Convention, by Law No 364 of 16 October 1989. After the deposit of its ratification on 21 February 1990, the Convention entered into force for Italy, as for the United Kingdom, on 1 January 1992. Switzerland signed and ratified the Convention in April 2007, with effect from 1 July 2007.¹ Liechtenstein, San Marino and Monaco have also ratified it, which matters for families who use structures in these jurisdictions. State Ratification In force Italy 21 February 1990 1 January 1992 United Kingdom 17 November 1989 1 January 1992 Luxembourg 16 October 2003 1 January 2004 Liechtenstein 13 December 2004 1 April 2006 San Marino 28 April 2005 1 August 2006 Switzerland 26 April 2007 1 July 2007 Monaco 1 June 2007 1 September 2008

Table: The Hague Trusts Convention in selected states.²

The two states have used the Convention differently. Italian practice soon developed the so-called internal trust (trust interno), a trust created by an Italian settlor for Italian beneficiaries over Italian assets but governed by a foreign law, usually English or Jersey law. After years of debate, Italian courts have generally recognized such trusts within the limits of Art. 13 of the Convention. That provision allows a state to refuse recognition of a trust whose significant elements are more closely connected with states that do not have the institution.³ Italy also created related domestic instruments. Since 2006 assets can be dedicated to a purpose deserving protection by a registered destination under Art. 2645-ter Codice civile. Law No 112 of 22 June 2016, known as the Dopo di noi law, favours trusts and other segregated arrangements for persons with severe disabilities.⁴ Switzerland ratified the Convention in order to give legal certainty to an existing trust industry. In 2007 it inserted Art. 149a to 149e into the PILA, which apply the Convention, regulate jurisdiction in trust matters and provide for the recognition of foreign decisions. An amendment of the Federal Act on Debt Enforcement and Bankruptcy segregated trust assets from the personal estate of the trustee.⁵

Trusts and Italian forced heirship

For Italian families the decisive limit of the Convention is Art. 15. It preserves the mandatory rules of the law designated by the conflict rules of the forum in matters such as succession rights, in particular the reserved shares of protected heirs. A settlor whose succession is governed by Italian law cannot use a trust to deprive the legittimari of their reserved shares. If the assets transferred to a trust during the settlor's lifetime exceed the disposable share, the protected heirs can bring the action for reduction after the death, in which the transfer to the trustee is treated like a gift.⁶ A trust settled by an Italian national domiciled in Lugano whose succession is governed by Swiss law is limited in the same way by the Swiss reserved shares, which are smaller.

The consequence is that a trust is not an instrument for avoiding forced heirship, whatever the governing law of the trust deed. Its uses lie elsewhere. A trust can manage assets for minor or vulnerable beneficiaries, keep a shareholding together after the death of the founder and avoid the fragmentation of real estate among many heirs. It also allows planning over several generations and provides a neutral trustee in families with internal conflict. Trust deeds drafted in Lugano for Italian settlors therefore usually contain provisions that respect the reserved shares, either by giving the protected heirs fixed interests or by allowing the trustee to make the payments necessary to satisfy their claims.

Notes

1. Hague Conference on Private International Law, status table of the Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition, https://www.hcch.net/en/instruments/conventions/status-table/?cid=59 (consulted 5 October 2026). Ratification act Legge 16 ottobre 1989, n. 364: Wikipedia (Italian), "Trust", https://it.wikipedia.org/wiki/Trust (consulted 5 October 2026, used as a last resort). ↩
2. HCCH status table (above). ↩
3. Hague Trusts Convention, Art. 13, text at HCCH, https://www.hcch.net/en/instruments/conventions/full-text/?cid=59 (consulted 5 October 2026). On the recognition of the trust interno by Italian courts, Wikipedia (Italian), "Trust" (above), used as a last resort. ↩
4. Codice civile, Art. 2645-ter, inserted by Decreto-legge 30 dicembre 2005, n. 273, Art. 39-novies, converted by Legge 23 febbraio 2006, n. 51, Brocardi.it, https://www.brocardi.it/codice-civile/libro-sesto/titolo-i/capo-i/art2645ter.html (consulted 5 October 2026). Legge 22 giugno 2016, n. 112, "Disposizioni in materia di assistenza in favore delle persone con disabilità grave prive del sostegno familiare", Gazzetta Ufficiale No 146 of 24 June 2016, https://www.gazzettaufficiale.it/eli/id/2016/06/24/16G00125/sg (consulted 5 October 2026). ↩
5. PILA, Art. 149a (trusts within the meaning of the Hague Convention), https://www.droit-bilingue.ch/de-en/2/29/291-149a-174.html, and Art. 149e (recognition of foreign decisions in trust matters), https://www.droit-bilingue.ch/de-en/2/29/291-149e-178.html (both consulted 5 October 2026); HCCH status table (above), entry into force for Switzerland on 1 July 2007; Hague Trusts Convention, Art. 11(b). Federal Decree of 20 December 2006 and DEBA, SR 281.1, Arts 284a and 284b. ↩
6. Hague Trusts Convention (above), Art. 15(1)(c): "succession rights, testate and intestate, especially the indefeasible shares of spouses and relatives". Codice civile, Art. 556 (above), on the notional addition of gifts. The treatment of transfers to a trust in the calculation of the reserved share is the author's summary of Italian doctrine. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.