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New Trust Law and Obligations of Trustee in UAE

UAE updated new regulations in the trust law, which is considered as New Trust Law Federal Law No. 19 of 2020. The New Trust Law offers the agreement and endurance of family businesses. It makes it possible for prevailing business establishments to overcome authorized restrictions. UAE’s New Trust Law of 2020 is substantial progress in the scope of trust jurisprudence. It is responsible for an active system of making speculation and investment regulations. Trust development, its objectives, functions, procedures, and termination are all regulated under the new trust law.

The Law also identifies the trustees’ rights and obligations. The New Trust is defined as the division of assets in accordance with a trust procedure to be directed for the benefit of the Trustee. The Trust is directed by trust proceedings that are done under the new Trust law. The legal proceedings of the Trust are uttered by the Settlor and create the rules, regulations, and operating conditions of the Trust.

Fundamentals of a trust according to New Trust Law

According to the new trust law, a Trust is established must have the following fundamentals;

  1. A Settlor is agreeable to assert a trust over property that they own
  2. Beneficiaries
  • Trustee to direct and govern the trust
  1. Purpose of the Trust (a reasonable purpose)
  2. Property that is recognizable and a matter of Trust
  3. Trust proceedings in written form or legal documentation
  • Registration of the Trust in the new UAE Trust Register

The Trustee

To start up a trust there is always a trustee. A person is considered a trustee who has legal matters know-how or a commercial company registered him as a Qualified Trustee. A trustee must be a certified good conduct person. It is also probable that a settlor performs as a trustee. Under new regulations, a certified company has the right to approve a person as a professional trustee that is able to perform his duties as a trustee for family trusts in any private company too.

The new trust law provides comprehensive requirements for the regulation, selection, substitution, and execution of a trustee. By the provisions of this law, a co-trustee will be appointed. The co-trustee has the right to share obligations such as power share, decision share, and governing rights. Both the trustees work jointly and share the rights of custodial.

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