A major reform of the succession law is currently pending in Russia. The reform aims at providing more flexibility for estate-planning and ensuring business continuity through generations.
The major innovation of the reform is the introduction of private foundations as an estate-planning tool and vehicle for asset transmission through fiduciary management. This legislative initiative was conditioned by the development and the internationalization of modern economic relations and the increasing presence of foreign elements in the estate-planning process.
A specific characteristic of a Russian private foundation is that it can only be created after the death of the founder under his/her will. The foundation is a successor of the deceased pursuant to the will. The legislator entrusted the establishment of this legal instrument to notaries.
Initially designed as a flexible tool for asset transmission through generations aiming at ensuring business continuity after the death of the owner pursuant to his will, the practical use and effectiveness of such tool seems to be a matter of controversy for many practitioners.
Other proposed key innovations such as the introduction of mutual wills and the succession agreements are still under consideration.
These developments are of particular interest for Russian nationals with cross-border estates and foreigners resident in Russia or having assets or business interests in Russia.
As part of its tailored approach to estate-planning advisory, the Private Client team at CMS Pasquier Ciulla Marquet & Pastor keeps abreast of the latest legal developments in foreign jurisdictions in view of providing its resident and non-resident clientele with the most appropriate and up-to-date solutions for succession planning.