Estate Planning — Israel
Will with a Trustee in Israel
Protecting Beneficiaries Over Time
When a beneficiary cannot manage assets immediately — a minor grandchild, an adult child with special needs, or a conditional bequest — appointing a trustee in your will ensures your wishes are carried out faithfully, over years or decades. Adv. Liron Elmaliach advises on the full structure of a will with a trustee.
What a Trustee Does in an Israeli Will
A trustee is a person or institution named in the will to hold and manage assets on behalf of a beneficiary — rather than transferring those assets outright. The trustee is legally obligated to act in the beneficiary's best interests and to follow the terms the testator set out in the will, whether that means paying out income monthly, releasing capital at specific ages, or funding particular expenses such as education or medical care.
The most common use cases are a minor who cannot legally own or manage significant assets, a person with special needs whose inheritance must be managed without disqualifying them from government support, and a beneficiary who has shown a pattern of financial difficulty — where receiving a large sum at once could cause more harm than good.
It is important to understand how a trustee differs from an estate executor (מנהל עיזבון). An executor winds up the estate — gathers the assets, pays debts, and distributes what remains. Their role is temporary and ends when the estate is closed. The trustee's role begins at that point and continues as long as the trust is in operation — sometimes long after the executor has finished.
The trustee owes the beneficiary a fiduciary duty. This means acting with loyalty, prudence, and transparency — keeping trust assets separate from personal assets, investing responsibly, maintaining accurate accounts, and reporting to the beneficiary or, where the beneficiary is a minor, to a guardian. Breach of these duties exposes the trustee to personal liability.
When to Appoint a Trustee — and Who to Choose
Minor grandchildren: If you want to leave assets to grandchildren who are still children, a trustee can hold those assets, invest them prudently, and distribute them at an age you specify — such as 21, 25, or upon completion of higher education. Without a trustee, a legal guardian (often a parent) would control the money, with court oversight.
Adult child or grandchild with special needs: A trust can be structured to provide supplemental support without disqualifying the beneficiary from means-tested government benefits. The trustee manages the funds and pays for specific expenses — equipment, therapies, enrichment activities — while the beneficiary's eligibility for national insurance benefits remains intact.
Conditional bequest paid over time: You may wish to leave a sum that is released in stages — a third at age 25, a third at 35, and the balance at 45 — or contingent on specific milestones. A trustee manages the assets between distributions and ensures each payment occurs only when the condition is met.
Protecting assets from a beneficiary's spouse: In some cases a testator wants to ensure that inherited assets remain with the beneficiary and are not subject to division in a future divorce. A properly structured trust can provide a layer of protection — though Israeli law in this area is nuanced and requires careful drafting.
Professional trustee versus family member: A trusted family member — sibling, adult child, or close friend — brings personal knowledge and commitment, but may face conflicts of interest, especially if they are also a beneficiary. A professional trustee — licensed attorney, accountant, or trust company — brings independence, financial expertise, and institutional continuity, at the cost of annual fees.
Whatever the choice, the will should name at least one successor trustee to prevent a gap in management if the primary trustee dies, resigns, or becomes incapacitated. Adv. Liron Elmaliach works with each client to find the structure that best matches their family, their assets, and their goals.
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