Jersey is one of the most highly regarded trust jurisdictions in
the world. Jersey's trust law dates back to 1984 and has
subsequently been copied by many other jurisdictions.
Trusts are normally established to confer certain benefits which
Family succession planning
A trust is a legally binding arrangement whereby a person (known
as a settlor) transfers assets to another person (known as a
trustee) who is entrusted with legal title to the trust assets, not
for his own benefit, but for the benefit of other persons (known as
beneficiaries, who may include the settlor or for a specified
A settlor establishes a trust by appointing trustees and
transferring the legal ownership of assets to those trustees. The
trustees are responsible for managing the assets for the benefit of
the beneficiaries. The details of this arrangement are recorded in
a formal document 'the Trust Deed'.
The settlor may give the trustees specific instructions as to
how to deal with and distribute the trust assets - 'a Fixed
Trust'. Alternatively, the settlor may give the trustee
discretion as to how to share the assets between the beneficiaries
and when to make distributions - 'a Discretionary
If the trust is discretionary, the settlor cannot insist that
the trustees act in a certain way, however it is possible for a
settlor to give the trustees guidance as to how he would wish them
to act in a 'Letter of Wishes'. The trustee should always
consider the terms of the Letter of Wishes in making any decision
in relation to the trust or its assets. In addition, it is possible
for a settlor to reserve certain powers where he may wish to
maintain control of certain aspects of the trust - 'a Settlor
Reserved Powers Trust'.
These powers might include:
Investment management decisions over the trust
Appointing and removing the trustees
Appointing and removing beneficiaries
Although the trust assets are legally owned by the trustees,
they are kept completely separate from any other property owned by
the trustees. The trustees have a legal obligation to manage the
trust assets in accordance with the Trust Deed and to ensure that
the rights of the beneficiaries are protected.
A typical Trust structure
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.
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