Dutch Civil Code

Book 1 Law of Persons and Family Law

Title 1.19 Fiduciary administration for adults

Article 1:431 Grounds for a fiduciary administration for adults
- 1. If an adult proprietor is temporarily or permanently unable to look after his own interests in property, due to:
a. his physical or mental condition, or;
b. squander (reckless spending) or the presence of problematic debts;
the Subdistrict Court may establish a fiduciary administration over one or more of the assets that belong or will belong to him as proprietor.
Assets belonging to a proprietor in the sense of this Title include assets belonging to a marital community of property or to a community of property within a registered partnership that do not fall under an exclusive right of administration of the spouse or registered partner of that proprietor.
- 2. If it is to be expected that a minor, at the moment on which he will reach the age of legal majority, will be in a situation as meant in the previous paragraph, then a fiduciary administration order may be given even prior to the moment on which the minor reaches adulthood.
- 3. A fiduciary administration may be established as well if it is to be expected that the proprietor in the foreseeable future will be in a condition as meant in paragraph 1.
- 4. Where legal proceedings are pending at court to obtain a provisional or conditional authorisation, an authorisation for a medical observation, an authorisation for a continued stay under the Reception into Psychiatric Hospitals Act or an authorisation under Article 33, first paragraph of that Act, that court shall have jurisdiction as well over a request to place one or more assets of the involved adult proprietor under fiduciary administration.

Article 1:432 Persons entitled to file a request for a fiduciary administration
- 1. The establishment of a fiduciary administration may be requested for by the proprietor himself, his spouse, registered partner or other life companion, one of his blood relatives in the direct line or in the collateral line up to and including the fourth degree, the person who pursuant to Article 1:253sa or 1:253t exercises authority over the proprietor, his legal guardian exercising guardianship over him as a minor, his legal guardian exercising adult guardianship as meant in Title 1.16 and his legal mentor as meant in Title 1.20. In the event referred to in Article 1:432, paragraph 3, a fiduciary administration can be requested for only by the proprietor.
- 2. Furthermore, the establishment of a fiduciary administration may be requested for by the Public Prosecution and by the institution where the proprietor is looked after or that offers guidance to the proprietor. The establishment of a fiduciary administration due to squander (reckless spending) or the presence of problematic debts may be requested for also by the College of Mayor and Alderman of the municipality where the proprietor has his place of residency. In both last events the petition shall mention as well why the persons mentioned in paragraph 1 – blood relatives in the collateral line in the third and fourth degree not included – have not filed a request for the establishment of a fiduciary administration.
- 3. The court before which a request for adult guardianship or for the abolishment of an adult guardianship is pending, may of its own motion, before rejecting or awarding this request, respectively, proceed to ordering a fiduciary administration as meant in the present Title.
- 4. A request to place one or more assets of an adult proprietor under fiduciary administration, made at a moment on which this proprietor is placed under adult guardianship, must be filed at the court that has jurisdiction to decide on the ending of that adult guardianship. This court may of its own motion, when ending that adult guardianship, proceed to ordering a fiduciary administration as meant in the present Title.
- 5. Paragraph 2 and 3 apply accordingly in case of an assignment of a spouse’s right of administration of property to the other spouse as referred to in Article 1:91 or in case of a request for such a court order.

Article 1:433 Substitution of assets placed under fiduciary administration
- 1. Unless provided otherwise in the court order in which one or more assets are placed under fiduciary administration, this administration includes all assets that must be considered to have come in the place of assets subject to fiduciary administration, besides the fruits and other benefits derived from property under fiduciary administration.
- 2. The Subdistrict Court may, either upon request of the person entitled to request for a fiduciary administration as meant in Article 1:432, paragraph 1 and 2, or of its own motion, expand the established fiduciary administration to one or more other assets of the proprietor or remove one or more assets from the fiduciary administration and may furthermore order that the rule of paragraph 1 shall not apply to one or more assets, in which case Article 1:434, paragraph 1, applies accordingly. The Subdistrict Court may also point out one or more acts as referred to in Article 1:441, paragraph 1, under (f), and withdraw the pointing out of such acts.

Article 1:434 Specification of the assets to be placed under fiduciary administration
- 1. In the court order referred to in Articles 1:432 and 1:433 paragraph2 the court specifies of its own motion which assets shall be placed under fiduciary administration or, respectively, shall be released from fiduciary administration.
- 2. A fiduciary administration of assets and the release of such assets from an already existing fiduciary administration shall take effect one day after the court order has been handed over or sent out to the applicant, unless the court order indicates a later date for this purpose. In the situation referred to in Article 1:431 paragraph 2 the fiduciary administration shall take effect at the moment on which the involved minor reaches the age of legal majority.

Article 1:435 Persons to be appointed as legal administrator
- 1. The court that establishes a fiduciary administration shall appoint at the same time, or as soon as possible thereafter, a legal administrator. It shall ascertain the willingness of the person to be appointed and shall assess that person’s suitability.
- 2. If necessary, an interim administrator may be appointed.
- 3. When appointing a legal administrator, the court shall follow the explicit preferences of the proprietor, unless there are valid reasons to object to the appointment proposed by him.
- 4. If the proprietor is married or registered under a registered partnership or maintains another close personal relationship with a life companion, then preferably his spouse, registered partner or that other life companion is to be appointed as legal administrator, unless the previous paragraph has been applied. If the preceding sentence is not applicable, then preferably one of the proprietor’s parents, children, brothers or sisters is to be appointed as legal administrator. When the proprietor after sometime enters into a marriage or registered partnership or finds a life companion with whom he starts to maintain a close personal relationship, then each of these persons may request the court to become appointed as legal administrator in replacement of an earlier appointed legal administrator.
- 5. Legal persons with full legal capacity can be appointed as legal administrator.
- 6. The following persons cannot be appointed as legal administrator:
a. persons without legal capacity (minors and adults under adult guardianship);
b. persons on whose behalf a protective mentorship has been established;
c. persons of whom one or more assets have been placed under a fiduciary administration as referred to in Title 1.19;
d. persons being in bankruptcy;
e. persons to whom the Debt Repayment Scheme for Natural Persons applies;
f. the legal administrator of the proprietor in the sense of Article 287, paragraph 3, of the Bankruptcy Act;
g. an immediately involved or attending relief or care worker;
h. persons forming a part of the management or personnel of the institution where the proprietor is looked after or that offers guidance to the proprietor;
i. persons tied to the institution where the proprietor is looked after or that offers guidance to the proprietor, because:
1° the institution or persons forming a part of the management of the institution, may exercise, solely or jointly with others, more than one half of the voting rights in the General Meeting of the legal person or may appoint or discharge more than one half of the Directors or Supervisory Directors of the legal person;
2° the person and the institution form a part of a group as meant in Article 2:24b, or;
3° the Director of the legal person also forms a part of the management or personnel of the institution.
- 7*. Another person than those meant in paragraph 4, who already is a legal guardian of an adult, a legal administrator or a legal mentor on behalf of three or more persons, is only eligible for an appointment if he, where it concerns his conduct of business or education, and, where applicable, the recruitment, training and guidance of and the supervision over the persons due to which he performs the tasks of a legal administrator, meets the quality standards set by Order in Council as well as the requirements meant in Article 1:436, paragraph 4, and in Article 3:15i.
- 8*. The person referred to in paragraph 7, shall submit to the court appointing him:
a. his declaration from which follows that he meets the quality standards and requirements meant in paragraph 7;
b. a report of an auditor as meant in Article 2:393, paragraph 1, of his opinions in regard of the way in which the standards and requirements are met, and;
c. a declaration of the auditor about the balance sheet and the profit and loss account (income statement) meant in Article 2:10 or, where applicable, about the annual accounts in conformity with Title 2.9. Article 2:396, paragraph 7, does not apply in regard of Article 2:393, paragraph 1.
Further rules may be set by Order in Council with respect to the layout and content of the declarations and reports and with regard to the way of submitting them. Where the person shows that he has already submitted the declarations and report to a court in the twelve months prior to his appointment, he is exempted from such submission.
- 9*. Exempted from the obligation to submit a declaration of an auditor as meant in paragraph 8 are:
a. those who have a financial enterprise which under the Financial Supervision Act may pursue the business of a bank;
b. notaries,
c. bailiffs;
d. auditors (accountants).
The enterprises and natural persons acting in the course of a professional practice referred to in the previous sentence may be exempted in full or in part by Order in Council from the requirements meant in paragraph 7 in respect of recruitment, training and the conduct of business.
- 10. The appointed person will be legal administrator the day following the one on which the court.

*) The text of this paragraph was already accepted, but not yet in force on 12th of March 2014.

Article 1:436 Duties of the legal administrator
- 1. The legal administrator must, as soon as possible, draw up an inventory list of all assets placed under fiduciary administration and submit a copy of this list to the clerk of the court that has jurisdiction according to Article 266 of the Code of Civil Procedure.
- 2. Articles 1:339, 1:363 and 1:364 apply accordingly.
- 3. If registered property is placed under fiduciary administration, then the legal administrator must, as soon as possible, present the fiduciary administration order and the court order in which he has been appointment as legal administrator to the keeper of the public registers for immovable property as referred to in Section 2 of Title 1 of Book 3 of the Civil Code in order to make the required registrations. If an enterprise or a share in a commercial partnership is placed under fiduciary administration, then the legal administrator must present the relevant court orders for registration to the keeper of the Commercial Register. The Subdistrict Court may order, either upon request of the person entitled to request for a fiduciary administration as meant in Article 1:432, paragraph 1 and 2, or of the legal administrator, or of its own motion, that the court order for the establishment of a fiduciary administration on account of a physical or mental condition, as far as the fiduciary administration concerns all assets that belong or will belong to the proprietor, and the court order for the appointment, suspension or discharge of the legal guardian, shall be registered by the clerk of the court in the public register referred to in Article 1:391.
- 4. Unless the Subdistrict Court has provided otherwise, the legal administrator must, as soon as possible, open an account with a credit institution which pursuant to the Financial Supervision Act is allowed to perform banking activities in the Netherlands; the legal administrator may only make use of this account for making or receiving payments in the conduct of the fiduciary administration.
- 5. The Subdistrict Court may at all times call the legal administrator to court to be heard and questioned. The legal administrator is obliged to provide the Subdistrict Court with all the required information.
- 6. The Subdistrict Court may demand from the legal administrator that he provides insight in his books, documents and other data carriers. It may furthermore demand a copy thereof.

Article 1:437 Two or more legal administrators
- 1. The court may appoint two legal administrators, unless valid reasons oppose to such an appointment.
- 2. When two legal administrators have been appointed, each of them may solely perform all activities falling within the scope of the ordered fiduciary administration, unless the court has provided otherwise.
- 3. In the event of a dispute between the legal administrators the Subdistrict Court shall settle their dispute upon the request of one of them or of an institution as meant in Article 1:432, paragraph 2. The Subdistrict Court may also establish a division of the remuneration.

Article 1:438 Administrative acts and power of disposition
- 1. During the fiduciary administration only the legal administrator and not the proprietor has the right to perform administrative acts with regard to assets under fiduciary administration.
- 2. During the fiduciary administration the proprietor may only in cooperation with the legal administrator or, if the legal administrator refuses to provide the necessary cooperation, with authorisation of the Subdistrict Court transfer or encumber assets which are placed under fiduciary administration.

Article 1:439 Protection of third persons
- 1. If a juridical act is invalid because it was solely addressed to or performed by the proprietor in spite of an existing fiduciary administration, then this invalidity can only be invoked against a counterparty who was or ought to have been aware of the fiduciary administration.
- 2. If an asset is alienated or encumbered by someone who, as a result of an existing fiduciary administration, had no power of disposition, then this lack of power can only be invoked against a party who acquired this asset or a limited property right on it if that party was or ought to have been aware of the fiduciary administration.

Article 1:440 Recovery of debt-claims from property under fiduciary administration
- 1. Debts derived from an act performed during the fiduciary administration with or towards the proprietor otherwise than in agreement with Article 1:438, paragraph 2, by a creditor who knew or ought to have known the fiduciary administration, cannot be recovered from the assets placed under fiduciary administration. The ending of the fiduciary administration does not change this.
- 2. If the fiduciary administration covers all assets which pursuant to Article 1:431 paragraph 1, qualify to be placed under fiduciary administration, then paragraph 1 applies accordingly to assets which at the moment that the act was performed were not placed under fiduciary administration from which debts could have been recovered.

Article 1:441 Duties of the legal administrator
- 1. Within the fulfilment of his duties the legal administrator represents the proprietor during the fiduciary administration in and out of court. The legal administrator shall ensure that the assets of the proprietor that are placed under fiduciary administration are invested efficiently, insofar these assets do not have to be used or sold for the provision of adequate care on behalf of the proprietor. Furthermore, the legal administrator may perform all acts on behalf of the proprietor that contribute to a proper fiduciary administration.
- 2. Nevertheless, the legal administrator needs permission from the proprietor or, if the proprietor is unable or unwilling to give that permission, the authorisation of the Subdistrict Court to perform the following acts:
a. disposing of assets that are placed under fiduciary administration or entering into agreements to dispose of such assets, unless the act may be regarded as a normal administrative act or has to be performed on account of a judicial order;
b. accepting a donation subject to obligations or conditions;
c. lend out money or engage the proprietor as a surety or a joint and several co-debtor;
d. agree that an estate, to which the proprietor is entitled, will be left undivided for a specific period of time;
e. entering into an agreement that makes an end to a dispute in which the proprietor is involved, except when it concerns a case as referred to in Article 87 of the Code of Civil Procedure or when the object of the dispute does not exceed a value of € 700;
f. other acts specified as such in the fiduciary administration order or in a later court order.
- 3. The Subdistrict Court may also grant the legal administrator a continuous authorisation to perform acts as meant in the previous paragraph under such conditions as it considers appropriate, and it may change or withdraw a granted authorisation at any time.
- 4. The legal administrator is entitled, to the exclusion of the proprietor, to demand the division of assets of which an undivided share belongs to the property under fiduciary administration. For such a division, however, the legal administrator always needs permission or authorisation in accordance with paragraph 2, even when the division is made on account of a judicial order. The Subdistrict Court may, as an alternative for granting its authorisation, also appoint a neutral person with corresponding application of Article 3:181 who, instead of the legal administrator, shall represent the proprietor at the division of property.
- 5. The legal administrator is entitled, to the exclusion of the proprietor, to accept an inheritance to which the proprietor has become entitled. Unless the acceptance is made with permission of the proprietor, the legal administrator cannot accept it otherwise than under the privilege that first an inventory of the estate of the deceased has to be made as meant in Article 4:190 paragraph 1.

Article 1:442 Protection of a party acting with or towards a legal administrator
- 1. If a person has performed a juridical act in his capacity as legal administrator, then the rights and obligations of the opposite party are set by the statutory provisions of Title 3.3 of the Civil Code. Statutory and other provisions regulating the powers of a legal administrator and facts which are important to determine these powers cannot be invoked against the opposite party if he was not aware and ought not to have been aware of these provisions or facts.
- 2. Without prejudice to the provisions of Article 6:172, the proprietor is liable for all obligations arising from juridical acts that the legal administrator in his function has performed in the name of the proprietor. Where the proprietor points out assets under fiduciary administration which provide sufficient recourse for a liability, he is not required to satisfy this debt from his other property.

Article 1:443 Authorisation to start legal proceedings
Before the legal administrator starts any legal actions on behalf of the proprietor, he may, as a way to be excused in advance, request the proprietor’s permission to go to court or, if the proprietor is unable or unwilling to give his permission, request for a substitute authorisation of the Subdistrict Court.

Article 1:444 Liability of the legal administrator
The legal administrator is liable towards the proprietor if he has failed to take care of the proprietor’s interests in a way as could be expected of a prudent administrator, unless this failure is not attributable to him.

Article 1:445 Rendering accounts
- 1. The legal administrator annually renders account to the proprietor, unless other moments have been set for this purpose; he also has to render account to the proprietor at the end of the fiduciary administration; when he ends his administrative duties and another legal administrator takes his place, he has to render account as well to this successor. The accounts will be rendered before the Subdistrict Court. The Minister of Security and Justice may establish a model according to which the account rendered must be drawn up. The legal guardian meant in Article 1:383, paragraph 7, shall submit annually the declarations and report referred to in Article 1:388, paragraph 8. If asked for, the legal guardian shall give an account of his activities to the Subdistrict Court. The legal guardian is entitled to a remuneration in conformity with the rules set for this purpose by the Minister of Security and Justice*.
- 2. If the proprietor is unable to appraise the rendered accounts or if it is uncertain to which proprietor account must be rendered, then the legal administrator renders account to the Subdistrict Court. An approval of these accounts by the Subdistrict Court does not affect the right of the proprietor to request the legal administrator at the end of the fiduciary administration to render account again over the same period, insofar this is not unreasonable.
- 3. The Subdistrict Court may – either of its own motion or upon the request of the legal administrator – release the legal administrator of his obligation to render account periodically before the Subdistrict Court; the Subdistrict Court may also order that accounts only have to be rendered every number of years.
- 4. The legal administrator meant in Article 1:435, paragraph 7, shall annually submit the declarations and report referred to in Article 1:435, paragraph 8*.
- 5. Furthermore, the statutory provisions of Subsections 1.14.6.10 and 1.14.6.11 of the Civil Code, with regard to the process of rendering account for a guardianship that has been exercised over a minor, shall apply accordingly to the accounts which have to be rendered by a legal administrator pursuant to the present Article.

*) The text of the last three sentences of paragraph 1 and of paragraph 4 was accepted, but not yet in force on 14 February 2014.

Article 1:446 Periodical distribution of benefits and the return of assets when final accounts are rendered
- 1. Insofar the Subdistrict Court has not provided otherwise, the net benefits produced by the assets under fiduciary administration, reduced with the remuneration payable to the legal administrator, will be distributed to the proprietor each time when account is rendered. Upon the request of the proprietor, the Subdistrict Court may set other dates for making such distributions.
- 2. Immediately after the legal administrator has rendered his final accounts for his administration, he hands over all assets to the person who is entitled to administer those assets after him. The legal administrator, however, may withhold the assets until he has received full payment of what is due to him.
- 3. Where account is rendered directly to the Subdistrict Court, the net benefits or the assets to be handed over remain under fiduciary administration of the legal administrator until the proprietor is able to receive them or, respectively, until it is no longer uncertain to which proprietor they belong, unless the Subdistrict Court has provided otherwise.

Article 1:446a After five years: report to the Subdistrict Court regarding continuation
Each time after a period of five years, or so much sooner as the Subdistrict Court has decided, the legal administrator shall report to the Subdistrict Court about the development of the fiduciary administration. He especially shall give his opinion in regard of the question whether the fiduciary administration has to be continued or can be replaced by measures less or more far-reaching. Facts of importance for the fiduciary administration or the continuation thereof, shall be mentioned immediately by him to the Subdistrict Court.

Article 1:447 Remuneration of the legal administrator
- 1. The legal administrator is entitled to a remuneration in conformity with the rules set fort his purpose by the Minister of Security and Justice.. On account of special circumstances the Subdistrict Court may, for a fixed or indefinite period of time, provide for a different remuneration than the one set in the fiduciary administration order or than the one set by law.
- 2. Where there are two or more legal administrators, the remuneration to which they are jointly entitled, shall be divided between them in proportion to the significance of the work performed by each of them.

Article 1:448 End of the duties of the legal administrator
- 1. The duties of the legal administrator shall end:
a. when the fiduciary administration ends;
b. in the event that the legal administrator was appointed for a fixed term: on expiry of that period;
c. when the legal administrator dies, gets bankrupt, falls under the Debt Repayment Scheme for Natural Persons or is placed under adult guardianship;
d. when one or more of the legal administrator’s own assets are placed under fiduciary administration in the sense of the present Title;
e. when the Subdistrict Court has discharged him as legal administrator as from a day to be set for this purpose by the court.
- 2. A discharge shall be granted to him, either upon his own request, either for compelling reasons or because he no longer meets the requirements to become a legal administrator, this upon request of a co-legal administrator or of the person entitled to request for a fiduciary administration as meant in Article 1:432, paragraph 1 and 2, or of its own motion. Pending the investigation, the Subdistrict Court may grant a provisional measure within the fiduciary administration and suspend the legal administrator. If necessary, the Subdistrict Court may do so without having heard the legal administrator in advance. In that case, the court order will lose its force after two weeks, unless the legal administrator has been given the opportunity during that period to be heard.
- 3. A former legal administrator must keep doing all the things that cannot be postponed without causing damage to the proprietor until the person who will succeed him in the administration has accepted to administer the involved assets. In the situations mentioned in paragraph 1 under point (c) this obligation shall be incumbent on his heirs, respectively, the liquidator in his bankruptcy or the administrator in the Debt Repayment Scheme for Natural Persons, provided that they have knowledge of the existence of the fiduciary administration; in the situation mentioned in paragraph 1 under point (d) the previous sentence applies to the legal administrator charged with the fiduciary administration meant in that paragraph.
- 4. Article 1:384 applies accordingly.
- 5. In case of a discharge for compelling reasons or because the legal administrator no longer meets the requirements for becoming a legal administrator, the Subdistrict Court may order that no accounts have to be rendered any longer. The Subdistrict Court may also seize (arrest) the books, documents and data carriers of the legal administrator and all assets belonging to the proprietor. For this purpose, it may enter any place.

Article 1:449 End of the fiduciary administration
- 1. A fiduciary administration ends on the expiry of the period for which it was established or when the proprietor dies or is placed under adult guardianship.
- 2. The Subdistrict Court may, if a fiduciary administration is no longer necessary or a continuation thereof has proved to be not sensible, abolish that fiduciary administration, this upon the request of the legal administrator or of the person entitled to request for a fiduciary administration as meant in Article 1:432, paragraph 1 and 2, or of its own motion. The court order shall enter into force as soon as it has become final and binding, unless it designates an earlier point in time.
- 3. The persons entitled to request for a fiduciary administration as meant in Article 1:432, paragraph 1 and 2, and the legal administrator may request for a prolongation of a fiduciary administration established for a specific period of time. The Subdistrict Court shall decide within two months after the petition (request) was lodged. Article 1:384 applies accordingly. No legal remedy is available against a denial of a request for a prolongation.