Definitions

The following definitions apply:

a) «resident agent»: a professional registered in the Register of Lawyers and Notaries or Chartered Accountants or Accountants of the Republic of San Marino;
b) «Judicial Authority»: the Court for Trusts and Fiduciary Relationships of the Republic of San Marino;
c) «Supervisory Authority»: the Central Bank of the Republic of San Marino;
d) «asset»: any right, power, faculty or expectation susceptible to economic evaluation;
e) «beneficiary with specific rights»: the person to whom rights, whether conditional or not, on the property are attributed in trust or on its income;
f) “trust assets”: the assets included in the trust fund;
g) “capital”: the trust assets originally or subsequently included in the trust fund, their permutations and substitutions, their increases, the income attributed to capital;
h) “settlor”: the person who establishes the trust;
i) “domicile”: the place where the person has established the centre of his or her civil life;
J) “trust fund”: the complex of trust assets and the legal relationships inherent to them;
k) “guardian”: the person who exercises control over the trustee’s work or the other duties assigned to him or her by the trust deed;
l) “Law”: Law 42/2010 and subsequent amendments and additions; 
m) “residence”: the place where a natural person has his or her registered residence or a company has its registered office; 
n) “beneficiary trust”: a trust established for the benefit of one or more beneficiaries; 
o) “purpose trust”: a trust established to pursue one or more purposes; 
p) “foreign trust”: a trust whose applicable law is a trust law of a foreign State; 
q) “resident trustee”: a trustee whose residence is in the Republic of San Marino; 
r) “non-resident trustee”: a trustee whose residence is not in the Republic of San Marino.

Notion of trust

A trust exists when a person is the owner of assets in the interest of one or more beneficiaries, or for a specific purpose. 
The circumstance that the settlor holds the office of trustee, or reserves certain rights or powers, is not incompatible with the existence of a trust. 
The settlor and the trustee may be beneficiaries of the trust, but the trustee may not be the sole beneficiary of the trust. 
The same trust deed may establish trusts for beneficiaries and purpose trusts.

Scope of application

It applies only to trusts established by expression of will of the settlor.

Governing law and recognition of foreign trusts

The identification of the governing law and the recognition of foreign trusts created by the will of the settlor and proven in writing are governed by the Hague Convention of 1 July 1985 on the law applicable to trusts and on their recognition.

Jurisdiction of the Republic of San Marino in matters of trusts

The jurisdiction of the Judicial Authority in matters of trusts exists when the defendant has domicile, residence, or registered office in San Marino or the trust is administered in San Marino or the law applicable to the trust is the law of the Republic of San Marino or the parties have agreed to submit the dispute to the Judicial Authority of San Marino. 

The jurisdiction of the Judicial Authority may be waived in favor of a foreign judge if the waiver is provided for in the trust deed or if it is agreed in writing. 

Establishment of the trust 

The trust is established by a written deed between living persons or by will. If the deed is stipulated between living persons, the form of a public deed is prescribed, without the need for witnesses, or of a writing with signature authenticated by a notary, who certifies its legality. 

The elements of the trust that must be included in the deed of establishment are: a) the will of the settlor to establish the trust; 
b) the identification of the trustee; 
c) the identification of the agent rresident if the trustee is a non-resident trustee;
d) the identification of the trust assets or the criteria that lead to the same;
e) the obligation of the trustee to communicate to the resident agent any fact or act that must be recorded in the Trust Register of the Republic of San Marino;
f) in purpose trusts:
i) the identification of a specific purpose, possible and not contrary to mandatory rules, public order and morality;
ii) the identification of the guardian who has the obligation to enforce the provisions contained in the trust deed or the criteria that lead to the same;
g) in trusts for beneficiaries:
i) the identification of the beneficiaries, or the criteria that lead to the same, or the identification of the person who has the power to identify the beneficiaries;
ii) the rules that ensure the presence of a guardian, entitled to take action against the trustee in the event of non-compliance when for any reason there are no beneficiaries and in other cases provided for by law; 
h) the criterion for distribution of the fund at the end of the trust for reasons other than revocation of the trust. 

Unless the trust deed provides otherwise, the trust is irrevocable. 

The trust deed and the dispositive deeds, with which assets are transferred to the trust, can be stipulated by means of a special or general power of attorney, having the same form provided for in the trust deed.  

Trust certificate 

Within fifteen days of the date of the establishment of the trust, the resident trustee or the resident agent, on the basis of the information provided by the non-resident trustee, draws up a certificate containing: a) the name of the trust chosen by the settlor or, in his absence, by the trustee; 
b) the indication of its revocability or irrevocability; 
c) the indication of the trustee and any limitations of his powers; 
d) the indication of the guardian, where applicable, and the nature of his powers; 
e) the indication of the settlor; 
f) in trusts for beneficiaries or also for beneficiaries, the indication of the beneficiaries with current rights on the trust fund, where they exist, or, if the trust deed so provides, the names of the beneficiaries and the entitlements of each; 
g) the date of the trust deed and the duration of the trust, if provided for in the trust deed; 
h) the law governing the trust; 
i) one of the following indications: 

1. “it is a trust deed for beneficiaries”;
2. “it is a trust deed for a specific purpose”;
3. “is a deed establishing a trust for beneficiaries and a trust for a purpose”;

j) the description of the purpose of the trust if it is a purpose trust; 
k) the indication of the resident agent, where applicable. 

The administrative sanction from a minimum of 3,000.00 (three thousand/00) euros to a maximum of 15,000.00 (fifteen thousand/00) euros shall be imposed by the person keeping the Trust Register on the resident trustee or resident agent who has not drawn up the trust certificate within the terms set out in paragraph 1. 

Trust Register of the Republic of San Marino 

The Trust Register of the Republic of San Marino is established. The Register is maintained by the Trust Register Office identified by delegated decree to be issued within one hundred and twenty days from the date of entry into force of the Law. 

The Trust Register Office may issue certification of its findings. The procedures for issuing the certifications are established by delegated decree, referred to in the previous paragraph. 

The notary who authenticated the signature of the certificate of the trust deed shall ensure its filing within ten days of the date of the authentication at the Trust Registry Office.

The Office shall ensure the registration of the trust in the Registry by transcribing the certificate and shall return to the notary the certification attesting to the registration of the trust. 

If the notary omits the filingof the certificate within the term indicated in paragraph 3, the resident trustee or the resident agent shall do so independently within the following ten days.

The resident trustee or the resident agent must request the cancellation of the trust from the Register within twenty days: a) from the attribution of the trust fund to the entitled subjects, following the extinction of the trust; b) from the modification of the law governing the trust, without prejudice to the provisions of Article 56; c) from the discovery of a cause of invalidity of the trust deed, or from its ascertainment in court.

Failure to cancel the trust is not enforceable against third parties, unless they were aware of the existence of the cause requiring the cancellation of the trust. 

The entity holding the Trust Register shall impose an administrative sanction ranging from a minimum of 2,000.00 (two thousand/00) euros to a maximum of 10,000.00 (ten thousand/00) euros on the notary, the resident trustee and the resident agent who have not registered the trust within the terms respectively set out in paragraphs 3 and 5. The resident trustee or the resident agent who fail to request the cancellation of the trust from the Register when the conditions set out in paragraph 6 occur shall be punished with the same administrative sanction. For the resident agent, the term runs from the moment in which he receives the notice of the occurrence of the events referred to in paragraph 6.  

Duration of the trust 

The trust takes effect from the moment in which the trustee becomes the owner of any trust asset and cannot last more than one hundred years starting from the date of the deed of establishment, unless it is a purpose trust. 

If the deed of establishment of the trust for beneficiaries does not determine its duration, or establishes a duration greater than one hundred years, the trust lasts one hundred years. 

 Invalidity of trust 

 The trust is invalid if: a) the trust deed is contrary to mandatory rules, public order or morality; 
b) the trust deed does not have the requirements set out in Article 6, paragraph 1, of the Law; 
c) the trust deed lacks or is unspecified the requirements set out in Article 6, paragraph 2 of the Law; 
d) the trust deed lacks the requirements set out in Article 7 of the Law, except for those for which the Law provides otherwise; 
e) the trust deed is simulated or the transfer of assets to the trustee is simulated. 

Invalidity is remedied when the cause of it has been removed.3. The trust is also invalid when the assets in trust or a part of them served or were intended to commit an act that constitutes a crime according to the law of the Republic, or represent the price, product or profit thereof. 

Invalidity is asserted by anyone who has an interest in it and can be detected ex officio by the Judicial Authority. The relevant action is imprescriptible. 

The invalidity of the trust does not affect third parties who in good faith have acquired rights for consideration from the trustee after the registration of the trust in the Register referred to in Article 8. 

The invalidity of individual provisions entails the invalidity of the entire trust deed if it appears that the settlor would not have established the trust without the provision of the trust deed affected by invalidity. 

The invalidity of individual provisions does not entail the invalidity of the trust deed, when the invalid provisions are replaced by law by rules imperative. 

The trust is invalid in the cases provided for by San Marino law as causes of invalidity due to defects in the will of the acts with patrimonial content. 

Trust fund

 Any asset pursuant to the Law may be included in the trust fund without the need for insinuation. 

The trust fund includes the assets of which the trustee becomes the owner in the exercise of his office, including those deriving from: a) the operations carried out by the trustee, including those of investment and disinvestment; 
b) from the proceeds and fruits in any way produced by the aforementioned assets. 

The trust fund also includes the profit obtained by the trustee as a result of acts or omissions committed in violation of his obligations. 

Unless the trust deed provides otherwise, a trustee may accept assets from anyone who has an interest to add to the trust fund. 

Separation of assets and destination restriction

 The trust fund is separate from the trustee’s personal assets and those belonging to other individuals or other trusts. In particular: a) the trust assets cannot be the subject of actions by the trustee’s personal creditors; b) in the event of a creditors’ contest, or bankruptcy proceedings of the trustee, the trust assets are separated from the trustee’s other assets and are excluded from the contest of his personal creditors; c) the trust assets are not included among those to which the family property regime applies and are not included in the trustee’s succession.

Unless the trust deed provides otherwise, the trustee may, at his discretion, divide the trust fund into several sub-funds.

The trustee disposes of the trust fund and administers it in trust for the benefit of one or more beneficiaries or for one or more purposes. 

Unless the trust deed provides otherwise, the trustee is required to perform all useful formalities to protect the effectiveness of the destination restriction. 

Amendment to the trust deed

 The trust deed may provide that the provisions contained therein and the choice of governing law may be amended in the interest of the beneficiaries or to promote the purpose of the trust. 

The modification of the founding act is subject to the requirements set forth in Article 6, paragraph 1, of the Law. 

Anyone who makes or receives changes to the elements indicated in the certificate referred to in Article 7 must notify the trustee within thirty days of when the change is made or received. If the trustee is not resident, he/she must notify the resident agent within fifteen days of making or receiving the change. 

A person who fails to comply with the communication obligations referred to in the previous paragraph will be subject to an administrative sanction ranging from a minimum of 2,000.00 euros up to a maximum of 10,000.00 euros by the person holding the Trust Register. 

The resident trustee or resident agent shall notify the Trust Register office by means of a certificate of the changes regarding the elements indicated in the certificate referred to in Article 7 within fifteen days of making or receiving them. The Office shall make the relevant annotations in the margin of the original certificate. 

An administrative sanction of a minimum of 2,000.00 euros up to a maximum of 10,000.00 euros shall be imposed on the resident trustee or resident agent who fails to make the communications required under paragraph 5 within the time limits.

The resident agent shall be required to contact the non-resident trustee, at least every six months, regarding any subsequent changes to the elements indicated in the certificate referred to in Article 7, by registered letter also sent for information to the person holding the Trust Register in the months of March and September of each year. 

The administrative sanction from a minimum of 2,000.00 euros up to a maximum of 10,000.00 euros is imposed by the person holding the Trust Register on the resident agent who does not correctly fulfill the obligation imposed by the previous paragraph. 

The modification of the trust deed does not affect the effects of the acts that the trustee has validly performed before such modification.

Revocation of the trust

 The trust deed may provide that the trust be revocable. 

The revocation occurs with the form required for the modification of the trust deed, communicated by the resident trustee or the resident agent to the Registry pursuant to Article 8 of the Law. 

In the event of revocation, the trustee shall transfer the trust assets according to the provisions of the trust deed and, in the absence thereof, to the settlor or his successors. 

The revocation does not affect the effectiveness of the acts performed by the trustee in accordance with the law and the trust deed before the communication of the revocation. 

Extinction of the trust

In addition to the causes provided for in the deed of establishment, the trust is extinguished: a) by the expiry of the term; 
b) by effect of the declaration of revocation; 
c) if it is a trust for a purpose: for the achievement of the purpose, or for the subsequent impossibility of achieving it; 
d) if it is a trust for beneficiaries:
i) for the lack of beneficiaries and of subjects who can be beneficiaries and of subjects who can identify them; 
ii) for the failure to come into existence of a beneficiary within the term; 

iii) for the extinction of the trust by part of the beneficiaries; e) for the cessation of the trust fund. 

The termination does not affect the effectiveness of the acts previously performed by the trustee in accordance with the founding act and the applicable laws. 

When the trust is terminated pursuant to paragraph 1, letter d) i) or letter d) ii) and there are no successors to the settlor, the trust assets are transferred to the Most Excellent Chamber of the Republic of San Marino.

Distribution of trust assets

 Once a cause for the extinction of the trust has occurred, the trustee shall complete any operations in progress and shall not undertake any new operations. 

Having drawn up its final report and inventory of the trust fund, the trustee shall transfer the fund to the entitled parties, in accordance with the provisions of the trust deed. If the provisions of the trust deed are not applicable to the entire fund, the trustee transfers the residual trust assets to the settlor or his successors and, in their absence, to the Most Excellent Chamber of the Republic of San Marino. 

Any obligation incumbent on the trustee passes by right to those to whom the trust fund is transferred, within the limit of the value of the assets received by each. 

On acceptance and refusal of appointment to the office of trustee

 The trustee appointed in the trust deed may accept the office expressly or tacitly. Acceptance is expressed when it is contained in a written document, or when the nominee assumes the title of trustee in relations with third parties. Acceptance is tacit when the nominee performs an act that necessarily presupposes the will to accept the office. 

Anyone who does not intend to hold the office may expressly refuse it, with a written declaration communicated to the settlor, or to his successors, or to the trustees who already hold the office. 

Trustee requirements

 The office of trustee may be held by one or more persons, natural or legal, none of whom is trustee of more than one trust subject to the Law or by one or more persons, natural or legal or legal entities, indicated as designated subjects in the context of the anti-money laundering regulations issued by the Republic of San Marino or by other States implementing the European Union directives or substantially equivalent to the latter. 

The professional exercise of the trustee activity in the Republic is regulated by delegated decree. 

Appointment of a new trustee

The appointment of a new trustee takes place according to the provisions of the founding act, or, in its absence, by the Judicial Authority. 

Unless the founding act provides otherwise, if the trust has a plurality of trustees, the new trustee is appointed unanimously by the trustees holding the office. In the event of disagreement, the Judicial Authority shall make the appointment.

The appointment of the new trustee must be communicated by extract, with an authenticated deed filed within fifteen days of the appointment, in the Trust Register. 

The new trustee replaces or, if there are other trustees, joins as co-owner of the trust fund and the outgoing trustee or the other trustees shall promptly perform the necessary actions to enable him to exercise his rights and powers and shall promptly communicate to him the deeds and documents pertaining to the trust. 

Good faith and diligence in fulfilling 

 The trustee fulfills the obligations and exercises the powers inherent to the office in good faith and with the diligence of a good father who must take care of interests that are not his own. 

In relation to trustees who carry out this activity professionally or to other individuals in possession of professional skills, diligence is assessed with regard to the professional nature of the activity performed. 

Protection of the integrity of trust assets

 The trustee must ensure that the trust assets are in his or her ownership. He protects the integrity and possession of the trust assets by performing all acts necessary or useful for this purpose. 

The trustee must keep the trust assets separate from any other assets in his possession, including those pertaining to other trusts. 

The trustee must deposit all bearer securities with banks or other custodians authorized to hold securities and required to comply with anti-money laundering regulations.

Management of trust assets 

Unless the trust deed provides otherwise and the nature of the trust assets allows it, the trustee manages the trust assets with the aim of preserving and increasing their value, diversifying investments and periodically evaluating their composition with the assistance of individuals with specific professional skills in asset management. 

The trust deed may limit or exclude the trustee’s power to invest, manage or dispose of the trust assets. 

Conflict of interest and patrimonial advantage

Before accepting the assignment, the person appointed as trustee by deed inter vivos must inform the settlor in writing of any causes of conflict of which he is aware between the interests he holds in any capacity and those of the beneficiaries or with the purpose of the trust. 

The trustee appointed in the will who finds himself in a conflict of interest shall promptly notify the Judicial Authority, which shall take appropriate measures to protect the interests of the beneficiary, or the purpose of the trust.

Unless the trust deed provides otherwise, the trustee cannot act in a conflict of interest with one or more beneficiaries or with the purpose of the trust. 

The trustee cannot, not even through a third party person: a) acquire the legal position of beneficiary or accept it as a guarantee; 
b) enter into deeds relating to the trust assets with himself, except in the case where he acts as trustee of another trust and this is permitted by the trust deed; 
c) compete on his own behalf or on behalf of third parties in the activity carried out as trustee. 

Unless the trust deed provides otherwise, the trustee may enter into contracts with himself if it is a company authorised to carry out banking or financial activities and enters into contracts relating to its own activity. 

Obligation to impartiality-Derogation

Unless the trust deed provides otherwise, when the trust has more than one beneficiary, or more than one purpose, the trustee holding thediscretionary powers can only benefit one or more of them. 

Obligation of confidentiality towards third parties

 Except as provided by law, the trust deed or anti-money laundering regulations, the trustee must not disclose to third parties, at any time, the information in his possession by reason of his office or use it for his own or others’ advantage.

Accounting and inventory

The trustee keeps an orderly and complete accounting of the facts that affect the trust fund. 

The trustee periodically assesses the market value of the trust fund according to the methods and in application of the criteria established by a specific delegated decree to be issued within 120 days from the date of entry into force of the Law. 

The trustee annually draws up and transcribes in the Book of Events by 31 March of the following year: a) the balance sheet of the trust; 
b) the inventory of the trust fund; 
c) a report containing the summary and description of the main events modifying the size and composition of the trust fund.

The different provisions of the trust deed remain valid. 

Communications 

The balance sheet, inventory and report referred to in Article 26 are sent by the trustee to the guardian of the purpose trust and to the guardian of the trust for beneficiaries, where applicable. 

Unless the trust deed provides otherwise, in the trust for beneficiaries the trustee is required to communicate to each beneficiary holding specific rights: a) notice of the existence of the trust, the name and domicile of the trustee, and the provisions of the trust deed that provide for such right; 
b) notice of all acts or facts that modify or extinguish such right; 
c) upon request of such a beneficiary, within a reasonable time, an inventory limited to the trust assets to which the beneficiary claims the right and the estimate of their market value commensurate with the right claimed by the beneficiary.  

The communications referred to in the previous paragraphs shall not take place with respect to persons who represent minors, unborn or conceived, unless they are prescribed by the trust deed. 

The trust deed, if it excludes or radically limits the obligations of referred to in paragraph 2, must ensure that there is always a guardian, entitled to take action against the trustee in the event of non-compliance. 

 Book of Events

The trustee establishes, updates and keeps the Book of Events of the trust, in which he records in chronological order the acts and events relating to the trust of which he has knowledge. In any case, the following must be recorded in the Book of Events: a) any information that the non-resident trustee has communicated to the resident agent;
b) the description of the events concerning the beneficiaries and the purpose;
c) the description of the trust assets;
d) the attributions made in accordance with the trust deed;
e) the delegation deeds;
f) the proceedings to which the trustee is a party in this capacity;
g) the dissent expressed pursuant to Article 30 or Article 52;
h) the documents referred to in Article 26, paragraph 3, except as provided for in Article 26, paragraph 4;
i) the changes in the trustees and guardians;
l) the exercise of the powers relating to the identification of beneficiaries and the attribution of specific rights. 

The resident agent annually requests the non-resident trustee to communicate to him any fact or act that must be recorded in the Book of Events. 

The Book of Events is numbered progressively on each page and stamped on each sheet. 4. The methods relating to stamping are established by a delegated decree to be issued within one hundred and twenty days from the date of entry into force of the Law. 

The Book of Events is exhibited, upon request, to the guardian and to the Judicial Authority, as well as to the Supervisory Authority according to theprovisions issued by it. 

The founding act may grant other subjects the right to consult the Book of Events and to extract or not a copy. 

Termination of the resident agent from office

 In the event of termination of his office as resident agent, the trustee must provide for the new appointment within thirty days.  

The trustee who does not fulfill the new appointment within terms referred to in the first paragraph of this article, the penalty of €5,000.00 (five thousand/00) applies and the same is required to carry out all the obligations of the resident agent. 

Article 39 and Article 41 of this law apply to the resident agent, insofar as they are compatible.

Obligations for advertising purposes

Unless the trust deed provides otherwise, the trustee carries out the necessary obligations for advertising purposes to make known that he is the owner of the trust assets in the capacity of trustee or in any case to make prove the existence of the trust according to the law of the place where the assets are located. 

Plurality of trustees

Each trustee has the right to participate in decisions to be taken unanimously or by majority vote.

Unless the trust deed provides otherwise, when the trust has more than one trustee, they act with a unanimous decision and jointly, but each has the power to carry out urgent acts for the preservation of the assets in the trust. 

If the deed institution allows the trustees to decide by majority, the dissenting trustee notes his dissent in the Book of Events of the trust. 

In the event that the trust can be administered disjointly, each operation relating to trust assets must be communicated in advance by the person who intends to carry it out to the other trustees. These, if they disagree with the act that the individual trustee intends to perform, note their dissent in the Book of Events of the trust. 

Powers of the trustee

The trustee exercises all the powers of the holder of the right over the trust assets, subject to the limitations resulting in the Trust Register. 

The trustee is entitled to act and to be sued in this capacity. 

Power of consultation

The trustee may seek advice from professionals regarding actions to be performed in relation to the trust and assign them the task of carrying out a professional service. 

The trust deed may provide that the trustee consults or obtains the consent of another person before exercising a certain power. 

A person does not become a trustee for the sole fact of having been consulted or having given or refused his consent pursuant to the previous paragraph. 

Power of delegation

Unless otherwise provided by law or the trust deed, the trustee may delegate his or her powers relating to the performance of acts or operations relating to the administration of the trust fund and the performance of acts of disposal of trust assets. 

The following powers may not be delegated: a) the power to decide how and when to assign trust assets to beneficiaries; 
b) the power to appoint a new trustee; 
c) the power of delegation. 

In administering the trust, the trustee may delegate the choice of investments exclusively to banks and investment firms subject to prudential supervision, not established or administered in countries identified by a specific provision of the Supervisory Authority, which proceed to the selection of investments according to the criteria specified by the trustee in a specific document. 

The delegation in favor of more than one person is considered joint. 

The person who is delegated to exercise a power pursuant to this article is required to comply with the same obligations as the trustee pursuant to Sections II and III of this chapter. 

The trustee may delegate powers to beneficiaries, but only if the trust has a guardian authorized to take action against the trustee and the guardian consents. 

The trustee supervises the work of the delegate and is responsible for the instructions and directives given to the latter.

Any beneficiary or the guardian may take action directly against the delegate. 

If more than one trustee is appointed, each trustee may delegate the exercise of his office to other trustees, provided that there are at least three trustees. The delegation may not last more than one year and has no effect if it is carried out to allow or facilitate the violation by other trustees of the obligations arising from the trust. 

The trust deed may provide that, if there are more than one trustee, the administration of the fund and the performance of acts of disposal of trust assets is delegated to only one of them, with exemption from liability in favor of the other trustees for the acts performed by the delegated trustee. The delegated trustee is however required to communicate to the other trustees once a year all the acts carried out by him for the purpose of collectively drawing up the annual budget. 

Form and content of the deed of delegation 

 The delegation under penalty of invalidity must: a) be in writing and have a certain date; 
b) identify the delegate; 
c) identify the trust; 
d) specify the delegated powers;
e) specify the date from which it takes effect and the period, or occasion, for which it is granted. 

Unless the trust deed provides otherwise, the trustee may not grant delegations that provide for: a) the delegate’s right to appoint his own substitute; 
b) the exemption or limitation of liability of the delegate towards the trustee or beneficiaries except to the extent that this can occur in favor of the trustee; 
c) the irrevocability of the delegation;
d) the delegate’s right to act in conflict of interest with the beneficiary, or with the purpose of the trust.

If the trust has only one trustee, he shall communicate in writing, without delay, the delegation to the person who has the power to appoint new trustees. 

Power to insure trust assets 

Unless the trust deed provides otherwise, the trustee is required to insure trust assets that are subject to perish or be damaged. Insurance premiums and compensation may be charged to capital or income, as determined by the trustee. 

Power to make advances in favor of beneficiaries 

Unless the trust deed provides otherwise, the trustee may make advances in favor of a beneficiary with specific rights over the trust fund so that he or she can face significant events in his or her life, if the trust assets are predominantly composed of money or easily liquidable assets. 

In any case, the trustee takes into account the advances made when making further allocations in favor of the same beneficiary and the final distribution of the fund.

Power to accumulate fruits and proceeds

The trust deed may oblige the trustee, or grant the trustee the power, to increase the capital, accumulating in the fund, in whole or in part, for a certain period, the fruits and proceeds deriving from the trust fund. 

Unless the trust deed provides otherwise, the trustee may always use the fruits and proceeds of the trust fund for the maintenance, education or in any case for the benefit of beneficiaries holding specific rights, who are minors or incompetent. 

class=”wp-block-heading”>Trustee’s Fees, Costs and Expenses 

The trustee’s fee is determined in the trust deed and is taken from the trust fund. The trustee performs the task free of charge if the trust deed does not provide for the attribution of compensation to the trustee and the methods of its determination. 

The sums necessary for the payment of the expenses incurred by the trustee in the exercise of his office are taken from the trust fund. 

The trustee satisfies the credits accrued for his compensation, the expenses with preference over the beneficiaries. 

Termination of the trustee from office

In addition to the causes provided for in the trust deed, the trustee ceases to hold office for: a) revocation, according to the provisions of the trust deed; 
b) renunciation, in the forms provided for in the trust deed or, in the absence of a provision, by means of a written communication with a certain date sent to the other trustees, if there are any, to the guardian, where applicable, and, in trusts for beneficiaries, to the beneficiaries holding specific rights; 
c) replacement by order of the Judicial Authority; 
d) creditors’ concurrence or subjection to another bankruptcy procedure; 
e) death or unfitness of the person to exercise the office for health reasons; 
f) liquidation, if a legal person or other entity. 

The unsuitability of the person to exercise the office for health reasons is ascertained by a specialist medical board appointed according to the trust deed, or in its absence, by the Judicial Authority. The board determines unsuitability in the presence of an impediment that is not merely temporary, such as to compromise the trustee’s ability to operate in a lucid and efficient manner. 

The renunciation of a trustee from office, carried out to allow or facilitate the violation by the other trustees of the obligations arising from the trust, has no effect. 

Transfer of trust assets 

By way of derogation from the provisions of common law on delivery: a) in any case of replacement of the trustee, the trust fund automatically passes to the new trustee trustee; 
b) in the event of termination of office of a trustee, the trust fund remains in the hands of the remaining trustees. 
c) in the event of the addition of a trustee, the trust fund becomes common to all members of the office. 

Upon the occurrence of a cause for termination of office, a trustee must promptly perform the actions that are necessary to implement the preceding provisions. 

In the event of death or termination of office of the trustee due to unsuitability, the heirs, the legal representative, or the persons assisting him shall promptly take care of such obligations. 

The new trustee shall replace the departed trustee in any pending legal proceedings. 

Delivery of deeds and documents

Upon leaving office, the trustee shall promptly deliver all deeds and documents pertaining to the trust to the remaining trustees or to the new trustee. 

If a trustee ceases to exist due to death or unsuitability, the heirs, the legal representative, or the persons assisting him shall take care of such obligations. 

Failure to comply with the obligations provided for by the Law and the trust deed 

Unless the trust deed provides otherwise, a trustee who fails to comply with his obligations is required, at the request of a beneficiary or the guardian, to compensate for the damage caused to the trust fund or to the acting beneficiary, unless he proves that the damage was caused by a cause not attributable to him. 

Compensation includes consequential damage and loss of profit. 

The trustee is not exempted from liability even if the damage is compensated in whole or in part by the profit deriving from the non-fulfilment, unless the profit is produced by the same act from which the damage arisesyear. 

The trustee is not liable for violations committed by others prior to his appointment. He must, in any case, take all appropriate measures to remedy any violations of which he becomes aware. 

Except as provided for in Article 33, paragraph 7, the trustee is not liable for the non-fulfilment of the delegated subjects, where the delegation has been conferred in good faith and with the required diligence. 

Responsibility of the trustees  

The trustees are jointly liable for damages arising from violations of the law and of the trust deed committed in the exercise of the office. 

Unless the trust deed provides otherwise, a trustee is not liable for damages caused by another trustee, where he has noted his dissent in the Book of Events of the trust and has immediately communicated it to the person eventually identified in the trust deed, or, in his absence, to the beneficiaries holding specific rights and to the guardian, where one exists. 

In any case, the trustees are jointly liable if, being aware of the violation, they have not done everything they could to prevent its commission or eliminate or mitigate its harmful consequences.

Joint liability of the beneficiaries 

The beneficiary who has instigated, requested or authorised the trustee’s breach is jointly liable with the trustee. 

Exemption from liability 

The provisions of the trust deed and agreements that exclude or limit in advance the trustee’s liability for fraud or gross negligence are null and void. 
A beneficiary may exempt the trustee from liability for damages caused to him, if he has full knowledge of the facts. 
Under the same conditions, the beneficiary may assume the debt of the trustee who is responsible for violations committed without intent or gross negligence. 

Prescription 

The right to compensation for damages expires five years after a beneficiary, or the guardian in the absence of existing beneficiaries, has become aware of the facts giving rise to the trustee’s liability. 

Trustee’s liability for obligations towards third parties

Any person, other than the other trustees, beneficiaries and the guardian, who holds rights against the trustee, deriving from obligations assumed or from acts performed demonstrating the quality of trustee or from acts or facts in any case inherent to such quality, can satisfy themselves only on the trust fund. 

The trustee has the right of recourse on the trust fund, with preference over any other person, in relation to any obligation he has fulfilled personally unless he must fulfill compensation obligations towards the fund or towards any beneficiary or a request for compensation is pending against him. 

Legal position 

The trust ceases if, there being no beneficiaries alive at the time of the trust’s establishment, at least one of them does not come into being in the following thirty years. 

The trust deed may provide that one or more persons are added or excluded from the legal position of beneficiary, determining by decision of whom and in what form. 

The trust deed may subject the legal position of the beneficiaries to a condition or term. 

The trust deed may provide that the rights belonging to a beneficiary on the trust fund or on its income:a) are neither subject to seizure nor to attachment nor included in the estate if there is a concurrence of its creditors or 
b) last until one of its creditors carries out an act of seizure or attachment or the beneficiary becomes subject to the concurrence of its creditors, with the consequence csuch rights then cease and different beneficiary positions arise. 

Those who receive or may receive assets or benefits from a purpose trust do not fall within the legal definition of beneficiaries. 

Rights of beneficiaries 

Unless the trust deed provides otherwise, each beneficiary with specific rights has the right to examine the deeds and documents concerning their rights and make copies of them. 

The trustee is not required to disclose beneficiaries of the reasons why he has exercised in a certain way a discretionary power that is entrusted to him, nor to communicate acts or documents from which such reasons result, unless the disclosure or communication is required by a judicial order. 

Renunciation, deferral of attribution and extinction of the trust by will of the beneficiaries  

A beneficiary may renounce in whole or in part his legal position with an act performed in the forms provided for in the deed establishing the trust. The waiver takes effect and is irrevocable from the moment it reaches the trustee. 

Unless the trust deed provides otherwise, a beneficiary may request in writing that the trustee postpone the transfer of the trust assets in his favor or to execute it in favor of the person indicated by him. 

Unless the trust deed provides otherwise, all beneficiaries with specific rights over the trust fund or, in their absence, all beneficiaries may demand from the trustee the termination of the trust and the transfer of the trust assets in their favor or according to their instructions. 

Deeds of disposition of the legal position of beneficiary

Unless the trust deed provides otherwise, a beneficiary may alienate, pledge, or otherwise dispose of, in whole or in part, his or her legal position by means of deeds that have effect with respect to the trustee from the moment they are notified to him or, in the case of a beneficiary with specific rights not limited to his or her life, also by will. 

If the beneficiary performs several inter vivos dispositive deeds in favor of different subjects, the deed notified first to the trustee has effect. 

Guardian’s Office 

The deed establishing a purpose trust provides for the office of the guardian and authorizes him to take action against the trustee in the event of non-compliance. 

The deed establishing a trust for beneficiaries may provide for the office of the guardian, but must provide for it for the period during which there are no beneficiaries in existence. 

The guardian fulfills the obligations and exercises the powers inherent to the office in good faith and with the diligence of a good father. If he has professional skills, diligence is assessed with regard to the professional nature of the activity performed. Unless the trust deed provides otherwise, the powers of which the guardian is the holder are fiduciary powers. 

The trust deed may provide for the remuneration of the guardian. The guardian is entitled to reimbursement of expenses and costs incurred for reasons inherent to the office, unless the trust deed provides otherwise. 

The trust deed may confer certain powers on the guardian, including the power to: a) appoint a new trustee, or to add one to the existing ones; 
b) appoint a new guardian, possibly in addition to himself; 
c) remove the trustee from office; 
d) veto the exercise of certain powers of the trustee; 
e) add or exclude beneficiaries; 
f) amend the law governing the trust; 
g) verify the financial statements of the trust. 

The exercise of the powers listed in paragraph 5 does not confer on the guardian the office of trustee. 

The guardian may be one of the beneficiaries with specific rights. 

Unless the trust deed provides otherwise, when there are several guardians of a trust, they shall decide by majority vote. Each guardian shall have the right to participate in decisions to be taken by majority or unanimous vote and shall be adequately informed of the subject of the decision. A dissenting guardian shall have his dissent recorded without delay in the Book of Events of the trust. 

Except as provided by the Law or the trust deed, the guardian shall not disclose to third parties, at any time, the information in his possession by reason of his office, nor use it for his own or another’s advantage. 

Unless the trust deed provides otherwise, the outgoing guardian shall appoint the next guardian; if he fails to do so, the new guardian is appointed by the Judicial Authority. 

Article 39 and Article 41 of the Law apply to the guardian, where compatible. 

Powers of the Judicial Authority 

The Judicial Authority holds a general jurisdictional power of control and supervision of any trust regulated by the Law, which it exercises by issuing the appropriate provisions. 

In addition to the other powers attributed to the Judicial Authority by law, the trustee, a beneficiary, the guardian and any interested party may apply to the judge to obtain a provision in order to: a) fulfill an obligation or exercise a power of the office of trustee or guardian; b) replace a trustee or guardian who has committed a violation of the law or of the trust deed or for reasons of expediency or for the absence, as regards the trustee, of the requirements set out in Article 18 of the Law; c) appoint a new or additional trustee or a new or additional guardian; d) administer and dispose of trust assets.

The trustee is required to request the Judicial Authority to appoint a guardian without delay if, for any reason, one is missing or has become missing and the Law requires that one be present. 

The trustee, if he deems it appropriate, submits a request to the judge to be authorised to carry out a useful act that does not fall within his powers or to obtain ratification in relation to an act already carried out or to have the judge make any amendments to the founding act that have become necessary or appropriate. 

By submitting a reasoned request, the trustee who is in a state of uncertainty regarding the performance of an act inherent to the office may ask the judge to rule on the matter, also by issuing him precise directives. 

The person appointed as trustee by the Judicial Authority who finds himself in conflict of interest shall submit to the judge an application to obtain the provisions provided for in Article 23, paragraph 2.

In appointing or replacing a trustee, the judge shall make provisions in relation to the custody and transfer of the trust assets, as well as the relevant deeds and documents. 

Unless otherwise ordered by the judge, the trustee and the guardian appointed pursuant to this Article shall have the same rights, obligations and powers as those vested, respectively, in the trustee and the guardian under the trust deed. 

The judge decides on the costs of the legal proceedings. 

Precautionary action 

The beneficiary holding specific rights or the guardian who has reasonable grounds to believe that the trustee is about to omit a required act or to perform an act that violates the Law or the trust deed, may apply to the Judicial Authority as a precautionary measure to obtain the appropriate measures. 

The introduction of the case on the merits does not suspend the effects of the precautionary measure adopted by the Judicial Authority. 

Separation and recovery actions 

If the trustee has confused the trust assets with other assetsni, the trustee who is not responsible for the confusion, any beneficiary and the guardian have the right to obtain the separation. The claim extends to assets of any kind with which the original assets may have been replaced and to their fruits. 

If the trustee has disposed of trust assets in violation of the rules of the trust deed or without consideration or for a manifestly inadequate consideration, the trustee who is not responsible for the act of disposition, any beneficiary and the guardian have the right to demand that the person entitled by the trustee return the assets to the trust fund except when, in the case of a disposition in violation of the rules of the trust deed, he could not have had knowledge of such violation. The claim extends to assets of any kind with which the original assets may have been replaced and to their fruits. 

In any case, actions for damages and any other action that may be taken to protect the trust remain valid. 

The separation action does not expire. The action for restitution is subject to a ten-year statute of limitations. 

Form of the trust deeds and registration of foreign trusts in the Trust Register of the Republic of San Marino

The trust deeds of foreign trusts in which the settlor is a natural person or a legal person resident in San Marino are subject to the same formal requirements set out in Article 6, paragraph 1, of the Law. 

Foreign trusts with administrative headquarters in the Republic of San Marino must be registered in a specific section of the Trust Register. Article 7 and paragraphs 3, 4, 5 and 6 of Article 8 of the Law apply. 

Resident trustees of foreign trusts must have the requirements set out in Article 18 of the Law.  

Abusive exercise of the office of trustee 

Anyone who exercises the office of trustee without having the requirements set out in the Law is punished with second-degree imprisonment and a fine of between Euro 8,000.00 and Euro 12,000.00.  

Subtraction and diversion of trust assets 

If the trustee subtracts or in any way distracts the trust assets, for his own or another’s profit, the provision of article 197, paragraph 3, of the Criminal Code applies, replacing the fourth-degree ban from the profession or art with the fourth-degree ban from the office of trustee. 

Conflict of interests 

The trustee who, in order to procure for himself or others an unjust profit, acts in a conflict of interest, causing financial damage to the beneficiaries of the trust or to the subjects intended to benefit from the achievement of the purpose of the trust, is punished with second-degree imprisonment and a fine from Euro 8,000.00 to Euro 12,000.00 and disqualification from holding the office of second-degree trustee. 

Violation of the reporting obligation

The trustee who fails to keeping, in whole or in part, the accounts relating to the trust assets is punished, if the act results in financial damage to the beneficiaries of the trust or to the subjects intended to benefit from the achievement of the purpose of the trust, with second-degree arrest and disqualification from the office of second-degree trustee.  

Falsehood in the accounting records relating to the trust 

The trustee who in the accounting or inventory relating to the trust assets, or in the accounting records relating to the trust provided for by the Law and by the law on the tax regime of trusts regulated by the law of the Republic of San Marino, presents data or facts that are wholly or partly untrue, or hides in whole or in part true data or facts, is punished with second-degree imprisonment and a third-degree daily fine, as well as second-degree disqualification from holding the office of trustee.

Administrative sanctions 

The administrative sanctions provided for by the Law are imposed by the person responsible for maintaining the trust register and are governed by Law no. 68 of 28 June 1989. 

Requirements relating to the registration and filing of deeds

 Without prejudice to the provisions of Article 52 of the Decree of 26 April 1995 no. 56, deeds executed or authenticated abroad must, before being used in the Republic, be deposited and kept with a Notary practicing in the Republic. With the deposit report, the Notary certifies its legality.