Fiduciary lawyer

A fiduciary lawyer is a lawyer authorised to carry out the mission of fiduciary within the meaning of article 2011 of the Civil Code: the lawyer receives, on a temporary basis, ownership of assets, rights or security transferred by a settlor, with the task of managing them for one or more beneficiaries. Law no. 2007-211 of 19 February 2007 and law no. 2008-776 of 4 August 2008 opened the fiduciary function to lawyers registered with the Bar, under strict conditions (taking out a financial guarantee, compliance with ethical rules, accounting segregation of the fiduciary patrimonies). The fiduciary lawyer thus combines an asset-management role and a professional ethical framework (professional secrecy, loyalty, independence) which distinguishes them from other institutional fiduciaries (banks, insurers, management companies).

Any French lawyer may accept a fiduciary mission, provided they satisfy the specific legal and ethical obligations: registration with the Bar, taking out a financial guarantee dedicated to the fiduciary activity (beyond the standard professional insurance), accounting segregation of the fiduciary patrimonies received, and declaration to the registration service within the month of the conclusion of the contract (French Tax Code art. 635, 8°). In practice, only a limited number of firms have the organisation, expertise and insurance required to carry out this function on a regular basis.

Integrated legal expertise: the fiduciary lawyer combines the drafting of the fiducie contract, the management of the assets and the interaction with other branches of law (tax, company, real estate). Strong ethical framework: the lawyer's professional secrecy, independence from third-party financial interests, loyalty towards the settlor and the beneficiary. Confidentiality: the mission falls within the lawyer's reinforced professional secrecy, enforceable beyond the fiduciary framework alone. Operational flexibility: compared with an institutional fiduciary (bank, insurer), the fiduciary lawyer offers greater agility in bespoke transactions and atypical configurations (art, complex security fiducie, restructuring).

The fiduciary lawyer must take out a specific financial guarantee, distinct from ordinary professional civil-liability insurance. The minimum legal rate corresponds to 5% of the value of real property and 20% of the other assets, rights or security transferred (article 209-1 of decree no. 91-1197 of 27 November 1991 organising the legal profession). Our firm is generally insured beyond the legal minimums to strengthen the confidence of settlors and beneficiaries. In the event of a breach by the fiduciary, the guarantee may provide compensation, even in case of insolvency of the latter. Added to this are the duties of prudence, diligence, loyalty and impartiality imposed by articles 2011 et seq. of the Civil Code.

The notary is a public officer whose mission consists in giving authentic character to instruments: the notary drafts and keeps the fiducie deed but is not, save in particular cases, intended to carry out the function of fiduciary in asset management. The fiduciary lawyer, for their part, is authorised to receive temporary ownership of the assets and to administer them actively throughout the duration of the contract. The distinction lies in the nature of the mission: authentication of the deed (notary) versus fiduciary management of the assets over time (fiduciary lawyer). In practice, the two often act in a complementary manner, notably where the fiducie includes real property requiring an authentic deed.

Fees are set freely, in compliance with the ethics of the profession (art. 10 of the law of 31 December 1971). Three pricing methods coexist: a global flat fee covering the setting-up and management over a given period; time-based fees according to the time spent; a proportional commission on the value of the assets administered (framed by ethical rules). A written fee agreement, compliant with article 10 of the 1971 law and with the RIN rules, is systematically signed. Costs depend mainly on the nature of the assets (real estate, securities, art, receivables), the duration and the complexity of the mission (number of transactions, reporting, audits).

The fiduciary lawyer must manage the assets with prudence, diligence, loyalty and impartiality (Civil Code art. 2026). In the event of a breach, the settlor, the beneficiary or any person with a legitimate interest may seek to establish their civil liability in order to obtain compensation for the losses suffered. In the event of a serious fault, the fiduciary may be removed from their duties and replaced according to the terms provided for in the contract (Civil Code art. 2027). They are also bound by a reinforced duty of confidentiality, the breach of which gives rise to disciplinary liability before the Bar, as well as civil and criminal liability (professional secrecy, art. 226-13 of the Criminal Code).

A fiducie is the operation by which a settlor temporarily transfers ownership of assets, rights or security to a fiduciary who manages them for one or more beneficiaries (Civil Code art. 2011 et seq.). Three main purposes: management fiducie (administration of assets on behalf of a third party), security fiducie (securing a debt through a temporary transfer of assets), transfer fiducie (sophisticated configurations of wealth transfer). The contract is necessarily in writing, registered, and of a maximum duration of 99 years. The transferred assets form a separate patrimony distinct from the fiduciary's personal assets: they cannot be seized by their creditors.

The French fiducie (law of 19 February 2007) is a civil-law contract that is formally documented, registered and subject to a precise legal framework (maximum duration, status of the fiduciary, segregation of patrimonies). The common-law trust (Anglo-Saxon) is a distinct legal institution, which may be created in writing, orally or by implied conduct, and which rests on a division between legal ownership (the trustee's legal ownership) and economic ownership (the beneficiaries' beneficial ownership), a distinction unknown to French law. In France, foreign trusts are subject to specific reporting obligations (French Tax Code art. 1649 AB) and to a dedicated tax regime that does not overlap with that of the domestic fiducie. A case-by-case analysis is required in an international context, in particular for trusts involving a settlor or a beneficiary resident in France.

Three parties: the settlor (who transfers ownership of the assets), the fiduciary (who receives and manages them: in France, only credit institutions, investment firms, insurance companies and certain legal professionals, including lawyers registered with the Bar, may carry out this function) and the beneficiary (who may be the settlor themselves). The creation requires a written contract specifying the assets, the parties, the duration (99 years maximum) and the objective. The assets are segregated from the fiduciary's own assets and cannot be seized by their personal creditors. The fiducie ends when the purpose is achieved or the duration has elapsed: the assets are then returned to the beneficiary or to any person designated by the contract.