More than that, it offers an explanation of why foundations are needed; authoritative summaries of how the UK and the US approach the taxation of this legal personality, which does not easily fit in with their systems; and an incisive analysis of the ways in which trusts and foundations diverge while aiming to achieve the same objectives for their founders.
The book’s strength derives from the quality of the questionnaire that Johanna Niegel and Richard Pease compiled for completion by outstanding practitioners in each of the jurisdictions identified.
Of course, since foundations take their validity from domestic legislation, rather than development of precedent, each country is likely to add its own bells and whistles, and not just adopt another country’s legislation wholesale. For some countries, which may not recognise trusts or which use them sparingly (I am thinking of continental European countries), the foundation will be an important and indeed necessary mechanism, whereas, for many of the offshore financial centres, it is an accessory to their more traditional trust offerings.
For those advising wealthy clients, particularly those with international families, it is no longer possible to pretend that it is not necessary to know how foundations work. Client families are becoming more sophisticated in terms of which measures of control they wish to maintain, and they will not necessarily be prepared to accept that the trust structure, beloved (and rightly so) by common-law lawyers, is the only option open to them.
The foundation is attractive to some due to its cultural background, characteristics, and, arguably, more understandable juristic basis as a separate legal personality. It is true that, in some places, foundation law is a new departure, and there is little experience of administering the structure itself, let alone the legal requirements. How will those who are used to running trusts cope with foundations, where there may be no requirement for beneficiaries to know about their rights or eligibility? Guernsey, for one, has felt more comfortable with having provisions in place for there to be someone to supervise the board of the foundation. The culture of the trust jurisdictions will influence the development of local versions of the foundation concept. That seems entirely healthy, for, as we go on, the globalisation of the foundation will mirror the way in which the trust has been globalised to satisfy different cultures through such concepts as purpose trusts and even the private trust company.
I recommend this book wholeheartedly as a compilation of the sources of the developing jurisprudence from jurisdictions around the world. The work has been compiled by a series of authors who thoroughly understand the significance of this development in a world that has to be more flexible and also more adaptive to the needs of clients, who want to balance provision for succession to businesses or wealth with maintaining influence over the control of the structure.
Private Foundations World Survey
By Johanna Niegel and Richard Pease
Reviewed by Martyn Gowar
Publisher: Oxford University Press
ISBN: 978-0-19-965194-8
Price: GBP175
