The Israeli Trust

Alon Kaplan & Meytal Liberman

STEP: Trust Quarterly Review (TQR)

9 July 2019

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.