Published in STEP Trust Quarterly Review Volume 17, Issue 2 2019

Dr. Alon Kaplan and Meytal Liberman

ABSTRACT
• Israel’s trust law applies to any trust relationship; however, the main route to create a private trust is by creating a hekdesh, also known as an endowment. The hekdesh is a document signed unilaterally by the settlor and can be executed either before a notary or as a last will and testament.
• Since a trust under Israeli law, including a hekdesh, is not considered a legal entity, common practice is to use an underlying company to hold the trust assets. The use of a hekdesh combined with an underlying company offers an efficient instrument for estate planning, contrary to a trust created by a contract between the settlor and the trustee.
• This article will review the trust under Israeli law, with an emphasis on the hekdesh and its use. It will also investigate the recognition of foreign trusts under Israeli law.