Luxembourg trust law and key features

The governing law

Luxembourg does not let people create a trust under its own law. A statute of 2003 deals with trusts in two ways, and the Legilux portal publishes it as the Law of 27 July 2003.

First, it approves the Hague Trusts Convention, so that a trust governed by foreign law is recognised in Luxembourg. Second, it creates the fiducie, a fiduciary contract.

Your lawyer confirms how it applies to your deed.

The deed of a foreign-law trust names its own governing law, and that law fills the gaps. Where the deed is silent, the trustee follows that law’s default rule.

The overview of Luxembourg trusts puts the structure in context.

Who may act as trustee

A trustee can be an individual or a company. A professional trustee is a business that acts as trustee for clients and keeps the records the deed and the law require.

In a fiducie the fiduciary must be a financial institution that the statute lists (source: Legilux, Law of 27 July 2003 on trusts and fiduciary contracts).

For a trust governed by foreign law, the deed names the trustee.

An individual and a professional firm differ in practice. Weigh continuity if the person dies or moves away, how records are kept and how much time the role takes.

Our part is onboarding, identity checks and the reports you see. The trustee’s part is the decisions and the formal records.

Features the law allows

Trusts that Luxembourg recognises have several features that families comparing places ask about. Each is a tool, not a result, and each comes mainly from the law named in the deed.

• Discretionary and fixed interests. The deed may leave distributions to the trustee’s discretion or fix each share. Your lawyer chooses which fits your aims.
• Classes of beneficiary. The deed may describe beneficiaries as a class, such as children and later descendants, so a birth needs no new deed.
• Letter of wishes. A private note tells the trustee how you would like it to use its discretion. The trustee reads it but is not bound by it.
• Protector and investment manager. Both roles exist only if the deed creates them and sets out their powers.
• Fiducie. A fiduciary contract keeps the transferred assets apart from the fiduciary’s own assets. Your lawyer confirms how far that goes.

Whether a feature works for your family depends on your residence, your assets and the law of the places where they sit.

Limits and requirements

Limits protect the beneficiaries as much as the settlor. Your lawyer confirms whether other Luxembourg rules, such as those on family inheritance, still apply to a recognised trust.

Before accepting a trust, we identify and verify the settlor, any protector and the other people connected with it, and keep records of that work.

The trustee also has reporting duties. Which of them apply depends on the case.

Your lawyer confirms who may see who stands behind a trust with a Luxembourg trustee.

How a court at home treats the structure, and how the timing of a transfer relates to a claim, are questions for your own lawyer.

Government charges and the trustee’s yearly fees are outside this page. The cost guide lists who charges for what.

Reading the law with a lawyer

Take this page to your lawyer as a checklist, not as advice. Ask which parts of the statute apply to your deed, which parts the deed may change, and which parts it may not.

Ask also how a court in your home country has treated structures like yours. That answer sits outside the statute, and it often decides whether the structure is worth its cost.

Bring the draft deed, the asset list and your letter of wishes to the same meeting. The advice then rests on the real papers.

Sources and review dates

Each fact above shows its source, the Legilux portal. The date shown beside each fact is the date of that official law page. Your lawyer confirms how it applies to your deed.

We review the facts on this page when the law or the official pages change. The common questions page answers the practical points, and the formation guide shows when each rule applies.