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Trusts are legal arrangements in which one person or entity - the trustee - holds and manages assets for the benefit of others - the beneficiaries - according to terms set by the settlor. In Israel, including Hod HaSharon, trusts are used for estate planning, asset protection, management of family wealth, care for minors or disabled relatives, and business succession. Israeli courts recognize express trusts as well as constructive and resulting trusts created by operation of law. Trust agreements should be clear in writing and drafted to reflect Israeli property, succession and tax rules so the trust will be effective and enforceable in local courts and registries.
Trusts involve legal, tax and practical complexities. You should consult a lawyer when you are planning to create, modify, administer or challenge a trust. Common situations that require legal help include establishing a trust to protect family assets, transferring real estate into a trust, appointing trustees and drafting trustee powers and duties, providing for minor or special-needs beneficiaries, resolving disputes among trustees or beneficiaries, responding to claims by creditors, and handling tax reporting and compliance. A local lawyer can advise on how Israeli law will treat the trust, prepare documentation that meets formal requirements, register property where needed, and represent you in court or in negotiations.
Trusts in Israel are governed by a combination of legal sources rather than a single unified statute. Key aspects to consider include the following.
Legal recognition and types - Israeli courts apply principles from contract law, property law and equitable principles to recognize express trusts, constructive trusts and resulting trusts. Courts will enforce properly documented trusts and can impose equitable remedies where a trust is implied by conduct or fairness.
Property registration - Real estate in Israel is typically registered in the land registry system known as the Tabu. Transferring property into a trust usually requires compliance with registration formalities and may involve additional steps when land is state-owned or subject to the Israel Land Authority rules.
Succession and probate - The Succession Law governs intestate succession and matters of inheritance. Trusts are often used to avoid or streamline probate, but estate and trust plans must be coordinated with succession law to achieve intended results.
Fiduciary duties - Trustees owe duties to beneficiaries that include loyalty, care, impartiality and proper record-keeping. A trust deed should clearly set out trustee powers, duties, standards of care and situations in which trustees may delegate authority or resign.
Taxation - Israeli tax law affects trusts in multiple ways. Income, capital gains, gift and inheritance tax rules - and the reporting obligations that apply to trustees, settlors and beneficiaries - must be considered. The tax residency of the settlor, trustees and beneficiaries will influence how the trust is taxed in Israel and abroad.
Regulatory and compliance matters - Trusts that operate businesses, hold regulated assets, or involve cross-border elements may trigger additional regulatory requirements. Anti-money-laundering and beneficial-ownership reporting obligations may also apply.
A will takes effect after death and governs distribution through probate. A trust can operate during life and after death, allowing management and protection of assets without full probate. Trusts offer ongoing control and can provide for staged distributions, professional management and protection from certain claims - but both instruments should be coordinated to avoid conflicting instructions.
Yes, but transfers of real estate must comply with registration formalities in the Tabu and with any Israel Land Authority rules if the land is state land. A lawyer will help prepare proper transfer documents, consider taxation and confirm that the trust structure is recognized for property-holding purposes.
A trustee may be an individual or a corporate entity. Trustees should be adults with legal capacity and must be able to fulfill fiduciary duties. Many settlors choose professional trustees or trusted family members. Where complex assets or ongoing management are involved, a professional trustee or law firm often provides greater reliability and continuity.
Trustees must act in the beneficiaries' best interests, avoid conflicts of interest, manage assets prudently, distribute income and capital according to the trust deed, keep clear accounts and provide information as required. Failure to perform these duties can result in court intervention, removal of a trustee and personal liability.
Tax treatment depends on the type of trust, the residency of the settlor, trustees and beneficiaries, and the nature of the income. Israeli tax law may tax income and capital gains arising in Israel differently than foreign-source income. Trustees have reporting obligations and may need to withhold tax in certain situations. Consulting a tax lawyer or accountant is essential at the planning stage.
Yes. Trusts are commonly used to provide for minors or disabled relatives while protecting eligibility for social benefits. Special-needs trusts require careful drafting to avoid unintentionally disqualifying beneficiaries from state benefits and to set appropriate standards for distributions and management.
Israelan courts may recognize foreign trusts to the extent their terms do not violate public policy or mandatory Israeli laws. Cross-border trusts raise additional issues including tax residency, conflicts of law, enforceability of trustee powers and recognition of foreign trustee actions. It is important to analyze both Israeli and foreign law consequences when dealing with international elements.
Beneficiaries may petition the court to remove a trustee, seek compensation for losses, or obtain other equitable relief. Courts have wide powers to supervise trust administration, replace trustees, order accountings and restore misappropriated assets. Early legal advice increases the chance of a timely and effective remedy.
Trusts are not an automatic tax-avoidance tool. Tax consequences depend on how the trust is structured and on applicable tax rules. While trusts can achieve efficient transfers and planning, they may trigger tax events for gifts, income or capital gains. Proper tax planning with legal advice is required to understand potential obligations and exemptions.
Look for a lawyer who is licensed in Israel and experienced in trusts, estate planning and tax law. Practical experience with property registration, probate and local courts in the Central District or Tel Aviv District is valuable. Ask about relevant cases, fee structure, communication style and whether the lawyer works with tax advisors and notaries to cover all aspects of a trust plan.
When seeking information or assistance, consider contacting the following types of local authorities and organizations that deal with trusts and related matters in Israel.
The Ministry of Justice - oversees registries and provides guidance on property and probate procedures. The local district courts - the Tel Aviv District Court and local magistrate courts handle probate and trust disputes. The Land Registry - Tabu - is responsible for real estate registration and transfer formalities. The Israel Tax Authority - administers tax rules affecting trusts, reporting and compliance. The Israel Bar Association - for information on finding licensed lawyers and for professional standards. Local notaries and certified public accountants - for document notarization and tax advice. Local municipal offices in Hod HaSharon - for practical information about local property and municipal matters.
Start by gathering basic information about the assets you want to place in a trust - titles, account statements, company documents, outstanding debts, beneficiary details and any existing wills. Make a list of your objectives - asset protection, care for dependents, tax planning, business succession or privacy. Schedule an initial consultation with a lawyer who specializes in trusts and estate planning in Hod HaSharon or the surrounding district. During the consultation, review costs, timeline, trustee options and tax considerations. Ask the lawyer to prepare a written plan and draft trust documents tailored to your goals. If necessary, obtain coordinated advice from a tax advisor and a notary to complete registrations and formalize transfers. Finally, review your trust and estate documents periodically and after major life events to ensure they remain aligned with your goals and with applicable law.
