Article 8 (1) of the Trust Act provides that, if the debtor sets up a trust with a fraudulent mind, the fraudulent transfer can be revoked. Along with such a provision, The system of fraudulent trust revocation is in essence the same kind of system as...
Article 8 (1) of the Trust Act provides that, if the debtor sets up a trust with a fraudulent mind, the fraudulent transfer can be revoked. Along with such a provision, The system of fraudulent trust revocation is in essence the same kind of system as the creditor's right to revocation in the sense that it aims at restitution of property, and that the trust behavior is a kind of fraudulent act. Considering such factors, the interpretation of Article 8 of the Trust Act on the right to revoke fraudulent trust should be based on the legal principle of the creditor's right to revocation in the Civil Code. Meanwhile, by act of creating a trust, the trust property is not only transferred to the trustee, but the beneficiary acquires the beneficiary right, which is a transformation of trust property. Therefore, trust property ‘belongs partly’ to the trustee and to the beneficiary. Such characteristic of trust needs specific interpretation regarding the interpretation of revocation of the fraudulent trust. Thus, it needs transformative application of the general principle in the Civil Code.
With regard to the core of trust relationship lies in entrusting management and disposal of trust property based on mutual trust between the truster and the trustee, and that the purpose of the creditor's revocation system and the system of fraudulent trust revocation lies in the recovery of trust property, I assert that what is revoked by fraudulent trust revocation is not trust act itself but is limited to transfer the property right to the trustee.
From this point of view, I assert that even if the beneficiary already received the benefit, the creditor, by making the claim of revocation of fraudulent trust and reinstatement, can reinstate the beneficiary right as well as the benefit the beneficiary already received. Next, regarding the responsibility of the trustee on reinstatement when the beneficiary already received the benefit, I assert that the amount of trust property the trustee should reinstate is reduced to the extent to which the benefit was provided in the respect of divided ownership of trust property.