Contentious Trusts and Asset Protection

Bender Brothers & Co has long-standing experience in the coordination of cross-border dynastic and trust litigation.  Such high-value disputes usually come with an elevated level of complexity and a corresponding need to manage costs.  Under such circumstances, availability to the right expertise and funding can make a material difference to the ultimate outcome. Bender Brothers & Co has managed a number of litigation teams through its network of senior lawyers and asset tracing specialists.  Access to such expertise is facilitated by the Firm’s support of the International Trust Arbitration Organisation (www.trustarbitration.org), a body specialising in fiduciary disputes.  Amongst the latter’s advisory board are some of the world’s leading contentious trust lawyers, who are frequently consulted by governments in the Commonwealth and the Gulf region for the drafting of legislation.  In addition, the firm can assist with litigation funding if the merits of a case were particularly strong through its relationships with leading legal finance firms on both sides of the Atlantic.    

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In anticipation of potential civil actions, certain precautions can be highly effective if implemented well before a dispute has arisen.  Funds held in an irrevocable discretionary structure managed and custodised in Liechtenstein, for example, enjoy a high level of asset protection. As the country never signed the Lugano Convention 2007, a plaintiff cannot rely on the reciprocity provisions of the Enforcement Act 1971 in the case of a foreign civil or commercial judgment rendered outside of Austria and Switzerland. Under such circumstances, relief could only be sought through the domestic legal process in the Principality. This judicial nuance is highly effective in discouraging frivolous actions arising from matrimonial or commercial disputes. In addition, foreign forced heirship provisions are almost certain to fail in the case of an irrevocable discretionary arrangement managed in Liechtenstein, particularly if the transfer of the corpus occurred two years before the demise of the trust settlor or foundation founder.

It is not unusual for local trust companies to administer common law arrangements in the Principality for the purposes of international wealth structuring. In this way, it is possible to benefit from the innovative features of a foreign fiduciary jurisdiction in the context of Liechtenstein’s highly secure financial infrastructure. A member of the International Monetary Fund, the country enjoys a AAA Standard & Poor's sovereign credit rating to support some of the world’s most robust private banks. Access to a large pool of regional expertise and status as a pragmatically-regulated whitelisted jurisdiction make the Principality’s strategic position particularly compelling. For these reasons, the Alpine nation is often chosen as the place within the European Economic Area from which to administer fiduciary arrangements under the proper law of Liechtenstein or a suitable common law jurisdiction.