Fiducie-Sûreté (Security Trust) Under French Law

A powerful asset-based security for creditors

The fiducie-sûreté is one of the most robust security mechanisms available under French law. It allows a debtor to transfer ownership of an asset to a trustee (fiduciaire) for the sole purpose of securing an obligation, while ensuring that the asset will revert to the debtor once the secured debt has been fully discharged.

Because the asset is segregated from the debtor’s estate, the fiducie-sûreté is particularly attractive for lenders and creditors seeking strong protection against insolvency risk.

Legal nature of the fiducie-sûreté

French law expressly authorizes the use of a fiducie as a security device (French Civil Code, Article 2372-1).

In practice, the mechanism operates as follows:
the debtor (the settlor or constituant) transfers ownership of a specific asset to a trustee, typically to secure a loan or other financial obligation. Once the secured obligation has been fully performed, ownership of the asset is returned to the debtor.

The secured obligation may be existing or future, provided that it is identifiable (French Civil Code, Article 2372-1, paragraph 2).

Asset segregation and protection against other creditors

One of the key advantages of the fiducie-sûreté is the segregation of the transferred asset. Assets placed in a fiducie form a separate patrimony, distinct from both the debtor’s and the trustee’s personal assets.

As a result, other creditors of the debtor cannot seize the asset transferred into the fiducie (French Civil Code, Article 2025). This feature makes the fiducie-sûreté a particularly effective tool in risk-sensitive financing and restructuring transactions.

Who may create and who may act as trustee

The ability to create a fiducie is broad. Both individuals and legal entities may constitute a fiducie-sûreté, regardless of their tax status.

By contrast, the role of trustee (fiduciaire) is strictly limited by law. Only the following professionals may act as trustees:

• credit institutions (banks),

• insurance companies,

• lawyers
  (French Civil Code, Article 2015).

This restriction is designed to ensure professional oversight, fiduciary accountability, and financial reliability.

Enforcement in case of default

If the debtor fails to perform the secured obligation, the method by which the assets held in fiducie are appropriated or realized depends on whether the creditor itself is the trustee or whether the trustee is a third party.

The fiducie agreement must clearly define the enforcement mechanics, ensuring predictability and legal certainty at the time of default.

Duration of the fiducie-sûreté

A fiducie may be established for a maximum duration of 99 years (French Civil Code, Article 2018, 2°).

Importantly, when a fiducie is used as a security, the death of the settlor does not terminate the contract, contrary to the general rule applicable to fiduciary arrangements (French Civil Code, Article 2372-1, derogating from Article 2029).

This continuity strengthens the protection of creditors over long-term obligations.

Registration of the fiducie

All fiducies must be recorded in the National Fiducie Register, established by Decree No. 2010-219 of 2 March 2010 (French Civil Code, Article 2020).

This registration requirement ensures transparency and enforceability vis-à-vis third parties.

Statutory protections for the settlor

French law provides several mandatory safeguards for the debtor creating a fiducie-sûreté.

Mandatory disclosure of the secured debt

In addition to the standard information required for any fiducie contract, the fiducie-sûreté agreement must expressly identify the secured obligation. Failure to do so results in nullity of the security (French Civil Code, Articles 2018 and 2372-1).

Notarial deed for shared or jointly owned assets

Where the fiducie concerns an asset held in community property or in joint ownership, the contract must be executed by notarial deed (French Civil Code, Article 2012, paragraph 2).

Right to appoint an independent protector

An individual settlor may not waive the right to appoint, at any time, a third party responsible for monitoring the preservation of their interests during the execution of the fiducie. This protector enjoys powers equivalent to those of the settlor and must be notified to the trustee upon appointment (French Civil Code, Article 2017).

A rechargeable security mechanism

The fiducie-sûreté may be structured as a rechargeable security.

This means that the asset initially transferred may later be used to secure additional debts, either in favor of the original creditor or a new one, provided that the original fiducie agreement expressly allows such reuse.

Where the debtor is an individual, the amount of the additional secured obligations is capped at the estimated value of the asset at the date of the recharge agreement (French Civil Code, Article 2372-5, paragraph 2, and Article 2488-5, paragraph 2).

Conclusion

The fiducie-sûreté is one of the most sophisticated and creditor-friendly security devices under French law. By combining asset segregation, contractual flexibility, and strong statutory protections, it offers an exceptionally high level of security—particularly in complex financing, restructuring, and cross-border debt recovery scenarios.

However, its effectiveness depends on careful drafting, strict compliance with formal requirements, and proper anticipation of enforcement mechanisms.

Need assistance with a fiducie-sûreté in France?

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• structuring fiducie-sûreté arrangements,

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• enforcing fiduciary security interests,

• managing default and insolvency situations.

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