The difference between Trusts in Japan and the US

The huge differences between Trusts in the US (&UK) and Trusts in Japan which must take into account are 1) level of understanding of family trusts and commercial trusts, and 2) Japanese law states the portion of the property the person is legally entitled, and such statement does not exist on the US (and US) laws.

1. Family Trusts and Commercial Trust

Accordance with the old story, Trust is originated in UK. This is the private agreement with the Person A (Settlor) and Person B (Trustee) based on the fiduciary relationship and Person A asks Person B to hold own property and to whom divide his trust property (beneficiary) upon his death. Since this agreement is based on the fiduciary relationship, Trust is generally recognized as private trust in the US (and UK). It seems similar agreement existed in Japan since long times ago but commercial trusts, which divided the profits to the many, unspecified persons, are rather general and famous in Japan. Commercial trusts are generally managed by licensed trust company and the purpose of such licensed company, typically trust bank, is the investment of asset and obtain the percentage of profit as commission. We can say this is the similar activity of the trustee that has a duty to invest of the trust asset carefully and effectively. But trustee is not working for obtaining the commission of the investment although trustee may get some fee for his work and both commission and fee have different meaning of reimbursement. Whenever I watch TV commercial sponsored by Trust Bank or Bank dealing with trust, I assume the audiences understandings of both commercial and private trusts are combined and merged and the true purpose and worry that real demand for family trust will gone further.

2. the portion of the property the person is legally entitled

In UK and US, if living trust exists after the settlor’s death, the property of him will be divided or transferred as the agreement provides. Because the property of the trust is not regarded as inheritance property, even the depose percentage is different from the intestacy, the property will be divided, transferred or continued as the agreement. On the other hand, the article of Civil law, the portion of the property the person is legally entitled, is the priority of the private agreement, the successor, except bothers and sisters of the deceased person, can claim half of their intestacy shares.

If the successors claim the right of the property which is legally entitled under this article and abatement from the asset already deposed or transferred to another as the trust agreement, the dividends have different result from the agreement, registration, and testator’s own will before deceased. Such the unique terms have been existed from the old Civil Law at the era of family head system and the purpose of this term was to avoid the sparse of the family asset and to divide the minimum property for the successor of deceased. However, no family head system exists in Japan and no need to prevent the sparse of the family asset by the government now. Should it be reconsidered this Article which will be less priority of the deceased person’s thoughts?