How a beneficiary waiver may operate, when another person can succeed and which documents and evidence a private foundation should review.
BRANDAUER Rechtsanwälte
Foundation law team, Salzburg and throughout Austria
Your matter is handled by a team combining corporate law, asset succession, real estate law and dispute resolution. We review the foundation declaration, board resolutions, information rights and liability issues and set out clear next steps. Mag. Bernhard Brandauer is responsible for the legal advice, supported by further specialised lawyers of the firm where the matter requires it.
A beneficiary may wish to waive their position or a specific distribution from an Austrian private foundation. A short statement such as “I waive my rights” is usually not enough. The exact wording, receipt by the foundation, the applicable foundation deed and the question whether another person actually succeeds to the position all matter.
The waiver may concern the beneficiary position as a whole, individual future distributions or an amount already approved. These alternatives do not have the same effect. A person described as a successor does not automatically receive the position that has become vacant.
This article explains which points should be reviewed and recorded when a beneficiary makes a waiver statement. The individual interpretation depends on the foundation deed, any supplementary deed, later amendments and the conduct of the foundation bodies.
Section 5 of the Austrian Private Foundations Act (PSG) describes who is a beneficiary of a private foundation. Being named or recorded as a beneficiary does not, however, answer whether a specific payment claim already exists. Equally, waiving one distribution does not necessarily mean that the person gives up their entire beneficiary position.
The foundation deed and the wording of the statement therefore have to be read together. If the text waives a distribution for a particular year or resolution, this initially points to a limited scope. If the beneficiary position is also intended to end for the future, that intention must be expressed clearly and consistently with the other instruments.
The foundation should not file the statement in isolation. It should compare it with the applicable foundation deed, any supplementary deed, beneficiary determinations and previous resolutions. Only then can it be assessed whether the list of recipients must change, a new determination is needed or only the payment decision is affected.
Clear wording prevents one statement from being given different meanings later.
| Variant | Possible content | Points to clarify |
|---|---|---|
| Individual distribution | Waiver of a specific amount, resolution or period | Amount, resolution date, payment date and any consideration |
| Future distributions | Waiver of specifically described later benefits | Beginning, duration, exceptions and relation to beneficiary status |
| Beneficiary status | Leaving the group of beneficiaries | Documentary basis, receipt, succession and required body action |
A waiver of one payment is not automatically a waiver of beneficiary status or future rights.
A waiver statement should be made in writing, dated and signed. It should be addressed to the private foundation or to the body designated by the foundation deed. A message sent only to an individual may later raise the question whether it reached the foundation at all.
The statement should identify the person, the foundation, the relevant position and the scope of the waiver. For an individual distribution, it should state the amount, resolution, period and possible conditions. If the person is to leave the beneficiary group, it should be clear whether only the current payment or also the beneficiary position for the future is meant to end.
Receipt should be recorded with the date and method of delivery. The foundation should file the statement and its attachments with the applicable deed version and record internally when it arrived. An oral statement or casual message can create avoidable interpretation issues in practice.
A waiver does not automatically create a new beneficiary position. Whether another person succeeds depends first on whether the foundation deed or an effective supplementary deed contains a replacement or succession clause. Family proximity, a previous expectation or the wishes of the departing beneficiary do not replace that basis.
The succession clause may name a particular person, establish an order, refer to a group or require a decision by a competent body. Depending on the drafting, it may also be necessary to establish that the conditions for succession have occurred and who may make that determination. The clause in the applicable version should be read before the result is assumed.
If there is no clear succession rule, several possibilities must be distinguished: the position may remain vacant; the deed may provide for a new designation by a body; or a formal court or other measure may be required. Section 5 PSG alone does not determine who automatically takes another person’s place after a waiver.
Succession should only be addressed once the scope and receipt of the waiver are clear.
Assemble the foundation deed, supplementary deed and amendments in chronological order.
Mark the beneficiary group, replacement rule, authority and any formal requirements. Clearly label drafts and superseded versions.
Distinguish one distribution, future distributions and the entire beneficiary position.
The statement should expressly identify the addressee, scope, period and any conditions.
Document arrival, date, delivery method and attachments in a traceable way.
Associate the statement with the correct foundation and applicable deed. Do not treat an unclear oral statement as final without further clarification.
Check whether and how another person succeeds under the foundation deed.
Record the triggering condition, competent body and evidence supporting the succession.
Document the new determination, resolution and communications consistently.
Only then should payment, information to those involved and internal filing be adjusted to the new situation.
A beneficiary may want to waive a specific distribution without giving up their position for all future purposes. This may concern a one-off payment, a particular transfer of assets or a single resolution. The statement should then expressly be limited to that event.
Conversely, a person may want to leave the beneficiary group while using wording that only mentions the current payment. The foundation should not automatically treat that as a complete departure. It must interpret the statement together with the foundation deed and the apparent purpose of the declaration.
Timing also matters. A statement made before an effective resolution may be assessed differently from a waiver of an already specific claim. For recurring distributions, periods, conditions and the treatment of later amendments should be stated clearly.
Whether a waiver can be revoked or changed cannot be answered in the abstract. Relevant factors may include the wording, receipt, acceptance or implementation, a resolution based on it and the type of right given up. Anyone wishing to reserve a right of revocation should state this expressly and define the time period.
The statement should also not be treated as a waiver of every information or inspection right. Section 30 PSG concerns separate information and inspection questions. Whether and to what extent those rights exist must be reviewed independently from the question whether a person gives up a distribution or beneficiary status.
The original wording, covering letter, attachments, receipt confirmation and the foundation’s response should be preserved for later interpretation. A later summary does not replace the original statement. If statements conflict, the open points should be clarified before a new resolution is adopted.
A reliable review should include at least the following documents:
These documents should be placed in a short timeline. It should show which documents applied at which time, when the statement arrived, whether a resolution already existed and whether a successor was actually determined. Further communication or a resolution can then be prepared on a reliable basis.
Three questions indicate whether the statement, the deed or succession should be reviewed first.
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Place the waiver, succession clause, receipt and competent resolution in one timeline. Before payment, check that the new determination complies with the applicable foundation deed.
Distinguish a waiver of one distribution, future distributions and beneficiary status. Interpret the original wording with its period, amount and conditions before succession is implemented.
Check the foundation deed and supplementary deed for a replacement or succession rule. The waiver alone does not establish a new beneficiary position.
Document arrival, date, delivery method and the foundation’s response. Check whether a resolution or payment has already relied on the statement.
Declaration, resolution and records when the beneficiary group changes.
Information and inspection under section 30 PSG as a separate review.
Documents that make a specific distribution decision traceable.
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