u s u f r u c t 55

The Dutch Civil Code provides expressly that if the usufructuary is granted the additional rights of disposal and consumption of the usufructuary assets, he/she may donate these assets in the form of small donations (DCC, art. 3:215, § 3). We do not believe it is possible for the donor to stipulate that he/she will be entitled to make larger donations or to dispose of these assets by last will. Such an entitlement would be contradictory to the inherent nature of usufruct.

7. Conclusion

From a tax and estate planning perspective, the Dutch usufruct offers the most attractive possibilities – from a civil law point of view – with regard to facilitating the aspiration of a donor who desires to donate assets and yet, through the reservation of a usufruct, retain an almost absolute power of control over the assets and the income gained from the assets. In fact, the usufructuary under Dutch law is not obliged to restore the property in whatever form, neither in kind nor by equivalent.

However, for many continental lawyers, the capacity on the part of a usufructuary fully to dispose of the usufructuary assets, enjoy all of the income and simply consume the capital, without any obligation to restore the assets to the nude owner, amounts to a complete negation of the essential features of a usufruct. The vast majority of authors are of the opinion that the reservation of a usufruct granting such entitlement to the usufructuary in a deed of donation is incompatible with the irrevocability principle inherent in the concept of a donation (BCC/ FCC, art. 946).112 Not surprisingly, this poses no problem whatsoever in the Netherlands since 2003 and in Germany, where donations containing revocability clauses have been legalised (BGB, § 346). In other jurisdictions, such as Belgium and France, donations between spouses are also revocable (BCC/FCC, art. 1096). Hence the Dutch type of

112Barbaix, Het contractuele statuut van de schenking, p. 533 and cf. de Wulf, ‘Schenking van roerend goed’, p. 164; Sagaert, ‘Oude zakenrechtelijke figuren’, p. 235; contra Verbeke, ‘Creatief met vruchtgebruik’, p. 568; Nijs, van Zantbeek and Verbeke, ‘Schenken met behoud van bezit’, pp. 25–6; Verbeke, ‘Modaliteiten’, p. 180; Verbeke and Vanhove, ‘Spelen met vruchtgebruik’, pp. 213–16; Verbeke, ‘Bevoegdheid Vruchtgebruiker’,

p. 408. Barbaix, Het contractuele statuut van de schenking, pp. 533 ff. is of the opinion that partial powers of consumption (without the obligation of any kind of restitution) can be compatible with the irrevocability rule of the donation (cf. the response in Verbeke, ‘Alstublieft en dank u wel!’, pp. 185–8).

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usufruct can in such cases in these jurisdictions be perfectly reconciled with the rules pertaining to donations.

One does not need to go that far, however, to appreciate the virtues and benefits of usufruct reservation clauses in estate and tax planning instruments. Both the quasi-usufruct (see § 4, above) and the modern interpretation of the ordinary usufruct (see § 3, above) offer considerable possibilities for the donor to reach a compromise between two objectives: on the one hand, to transfer assets to the next generation by means of donation, and on the other hand, to retain an acceptable measure of control over the assets and income gained from the assets by the reservation in the deed of donation of a usufruct over the assets, fortified by whatever clauses he/she desires to strengthen his/her position as usufructuary. This explains why the utilisation of the concept of usufruct is such a popular technique among estate planners in certain civil law jurisdictions.

part ii

Case studies