Significant enhancements have been made to Jersey's Trusts
Law recently. It will be the fifth time the Trusts (Jersey) Law
1984 has been amended and, whilst specific in nature, the changes
will make Jersey an even more attractive destination for wealth
The prevailing themes of Amendment No 5 to Jersey's Trusts
Law are clarification and certainty. This can be seen in a number
of the amending provisions.
Definition of purpose
Non-charitable purpose trusts were introduced to Jersey's
Trusts Law in 1996. Practitioners have debated whether a trustee
merely holding a particular asset (such as shares in a company)
could be considered, without more, to constitute a genuine
'purpose'. Amendment No 5 clarifies the position by
introducing a definition of purpose. The definition of purpose is
non-exhaustive and confirms that a purpose may involve the
conferral of any benefit on any person, it need not consume nor be
capable of consuming the income or capital of the trust and
includes "without limitation, the acquisition, holding,
ownership, management or disposal of property and the exercise of
Trustees transacting with themselves on behalf of different
It is a generally accepted legal principle that it is not
possible for a person to make a valid contract with him/herself. In
the world of trusts, it is sometimes the case that assets are
transferred between two trusts, for example by way of a sale, where
both trusts have the same corporate trustee. An addition to Article
31 of the 1984 Law makes it clear that a person in the capacity as
a trustee of one trust may enter into a contract or other
arrangement with himself or herself in his/her capacity as a
trustee of one or more other trusts.
Another issue which has vexed practitioners for a number of
years has been the development of 'chains' of indemnities,
when the management of a trust has moved from one trustee to
another and this process is repeated a number of times and each
retiring trustee seeks indemnities from its successor. An amendment
to Article 34 of the 1984 Law now makes it clear that earlier
trustees in the chain can enforce indemnities in their favour from
successor trustees notwithstanding the fact that they may not have
been a party to a subsequent indemnity given in their favour.
Limitations of activities
Article 57 of the 1984 Law has been amended to clarify the
period within which an action founded on breach of trust may be
brought against a trustee by a beneficiary. In most cases the
action must now be brought within three years of the earlier of the
date of delivery of the final accounts of the trust to the
beneficiary, or the date on which a beneficiary first has knowledge
of a breach of trust. Save in the case of fraud, no action founded
on breach of trust can now be brought against a trustee by any
person (not just beneficiaries) once a period of 21 years has
expired after the date of the breach.
Remuneration of professional trustees
Currently a trustee of a Jersey law trust is not entitled to
remuneration unless specifically authorised by the trust's
terms, unless all of the beneficiaries of the trust have consented
in writing or unless the Court has granted an order permitting such
remuneration. Amendment No 5 introduces a statutory right for
professional trustees to be remunerated.
It is reassuring to see the 1984 Law evolve further. The clear
statutory framework serves to underpin Jersey's position as a
leading jurisdiction for the management and administration of trust
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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