WHEN SHOULD YOU SET UP A FIDUCIE?
A question we are frequently asked is in which cases, and by whom, a fiducie (the French-law fiduciary arrangement) should be created. The answer is simple:
Who needs a fiducie ?
You need a fiducie if:
- You practise a high-risk profession (avocat, doctor and any medical or paramedical profession), notaire, chartered accountant, architect, magistrate, etc.)
- You are a high-level sportsperson or artist;
- You are a politically exposed person;
- You are a person with high international mobility and/or working in several countries;
- You are exposed to a geopolitical risk;
- You are a senior executive or a company director;
- You are an entrepreneur;
- You are a journalist, an activist or a member of an international organisation, or an active campaigner;
- You are a member of the intelligence services;
- You are an influencer or content creator with significant media visibility (>100.000 people);
- You have inherited a substantial estate that you wish to preserve;
- You are retired and wish to organise your wealth and protect future generations.
If you fall within one of these situations and you take your financial security and that of your family seriously, you must have a fiducie, the French-law fiducie.
You may not yet realise it, but make no mistake: if you fall within one of these situations, you genuinely need one.
Who does not need a fiducie ?
By contrast, you do not need a fiducie if:
- You are an employee;
- You have net financial wealth of less than 500.000 euros / dollars;
You are prepared to lose the fruit of a lifetime’s work and to start everything over if proceedings turn against you.
When is the best time to set up a French-law fiducie?
The best time was the day you were born. The second best is today.
Indeed, the sooner your fiducie is set up, the sooner your wealth will be sheltered and secured. You do not know it yet, but a creditor or a government authority may
well be about, at the very moment you are reading these lines, to bring proceedings against you on all manner of grounds.
Sadly, by the day you learn of the writ of summons, it will already be too late.
May I set up a fiducie (the French-law fiduciary arrangement) once proceedings have been brought against me ?
Let us be clear and honest: no.
The reason is simple: the risk of fraud is obvious (the intention is clear: to conceal one’s wealth when one knows oneself to be at risk).
Not only is this a criminal offence, but no serious Fiduciaire, nor any bank (for the fiduciary bank account) or insurance company (for the guarantee of the Fiduciary Patrimony), will ever agree to open a contract for a person at risk.
The courts will moreover see to it that the fiducie is declared void and the wealth recovered if it is set up at the outset of or during proceedings.
Conversely, if the fiducie is set up in advance, clearly and honestly, it is untouchable and so is your wealth.
To quote a famous British prime minister of the last century: « The day you learn you have cancer is not the day to stop drinking or smoking ».
It is indeed better to prepare for it as well as possible in advance.
Frequently asked questions: when should a fiducie be set up?
When should a fiducie be set up?
A fiducie (the French-law fiduciary arrangement) is set up in order to protect a vulnerable relative, secure wealth, secure a financing (fiducie-sûreté), organise a transmission or anticipate business difficulties. It is a bespoke tool suited to situations in which conventional arrangements reach their limits.
What are the main types of fiducie?
A distinction is drawn chiefly between the fiducie-gestion (managing assets on behalf of a Beneficiary) and the fiducie-sûreté (securing a debt). Each may be adapted to the objectives pursued: protection, transmission, provision for the future or philanthropy.
Must one wait for difficulties before setting up a fiducie?
No, quite the contrary. The fiducie must be planned ahead: set up too late, in particular in the face of imminent litigation or insolvency proceedings, it risks being unenforceable. Preparing for it in advance guarantees its full effectiveness.
How much does setting up a fiducie cost?
The cost depends on the complexity of the matter, the nature of the assets and the mission entrusted to the Fiduciaire. It comprises the drafting of the agreement and the Fiduciaire’s remuneration, to be weighed against the legal certainty obtained.
Who may act as Fiduciaire?
The law reserves the status of Fiduciaire to certain professionals, in particular avocats, credit institutions and insurance undertakings. The fiduciary avocat offers the advantage of integrated legal advice and of stringent professional-conduct obligations.
The House of Harlington since
2006