Following approval by the Privy Council, the Foundations (Jersey) Law 2009 was registered by the Royal Court of Jersey today, Friday 19 June and will come into force on Friday 17 July.
Unlike trusts, foundations are separate legal entities. Validity depends solely on the Certificate of Registration, so there is greater certainty than with trusts. Foundations are managed by a Foundation Council, like the board of directors of a company. Like a company, foundations can be redomiciled allowing existing foundations in Panama and Liechtenstein to redomicile to Jersey.
Unless expressly included, no duties are owed to beneficiaries because the Foundation Council owes its duties to the foundation, so the beneficiaries cannot terminate it against the wishes of the Founder as they can with a trust. For the same reason disclosure can be restricted so that, for example, a Founder can provide that his children are not made aware of the foundation until they have reached an age by which they will have had to make their own way in the world.
Foundations cannot trade, but otherwise they can do anything lawful, including owning trading companies, so the extent of their application will be limited only by the ingenuity of those establishing them. They are a very welcome addition to the toolbox of wealth planning vehicles which Jersey has to offer, and despite the bad press from misuse of similar vehicles in other jurisdictions, clients and their advisers can have complete confidence in Jersey foundations because of the stringent regulatory regime, as confirmed by Jersey's G20 white list status. Indeed Jersey will be the only G20 white list jurisdiction able to offer foundations.
Crill Canavan's Trusts and Foundations Team
With a specialist team of experienced lawyers, Crill Canavan's Trusts and Foundations Team provides efficient and practical commercial non-contentious advice in relation to the following areas of expertise:
- Trusts and Foundations: all aspects of trusts and foundations for both individuals and organisations.
- Sharia-compliant: trust and foundation documentation.
- Retirement Annuity Trusts (RATS): established and approval of scheme.
- Employment Benefit Trusts: pensions schemes, death in service schemes, employee and executive share and share option schemes.
- Charitable and Purpose Trusts: establishing philanthropy and other purposes.
- Private Trust Companies: for wealthy families wishing to utilise an alternative to a trust.
- Managed Trust Companies: for relationships with existing trust service providers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.