Jersey: Trusts (Jersey) Law 1984 - Section 2

Last Updated: 5 October 2007
This article is part of a series: Click Trusts (Jersey) Law 1984 - Section 1 for the previous article.

31. Trustee Acting In Respect Of More Than One Trust

(1) A trustee acting for the purposes of more than one trust shall not, in the absence of fraud, be affected by notice of any instrument, matter, fact or thing in relation to any particular trust if the trustee has obtained notice of it by reason of the trustee's acting or having acted for the purposes of another trust.

(2) A trustee of a trust shall disclose to his or her co-trustee any interest which he or she has as trustee of another trust, if any transaction in relation to the first mentioned trust is to be entered into with the trustee of such other trust.

32. Trustee's Liability To Third Parties

(1) Where a trustee is a party to any transaction or matter affecting the trust –

  1. if the other party knows that the trustee is acting as trustee, any claim by the other party shall be against the trustee as trustee and shall extend only to the trust property;
  2. if the other party does not know that the trustee is acting as trustee, any claim by the other party may be made against the trustee personally (though, without prejudice to his or her personal liability, the trustee shall have a right of recourse to the trust property by way of indemnity).

(2) Paragraph (1) shall not affect any liability the trustee may have for breach of trust.

33. Constructive Trustee

(1) Subject to paragraph (2), where a person (in this Article referred to as a constructive trustee) makes or receives any profit, gain or advantage from a breach of trust the person shall be deemed to be a trustee of that profit, gain, or advantage.

(2) Paragraph (1) shall not apply to a bona fide purchaser of property for value and without notice of a breach of trust.

(3) A person who is or becomes a constructive trustee shall deliver up the property of which the person is a constructive trustee to the person properly entitled to it.

(4) This Article shall not be construed as excluding any other circumstances under which a person may be or become a constructive trustee.

34. Position Of Outgoing Trustee

(1) Subject to paragraph (2), when a trustee resigns, retires or is removed, he or she shall duly surrender trust property in his or her possession or under his or her control.

(2) A trustee who resigns, retires or is removed may require to be provided with reasonable security for liabilities whether existing, future, contingent or otherwise before surrendering trust property.

(3) A trustee who resigns, retires or is removed and has complied with paragraph (1) shall be released from liability to any beneficiary, trustee or person interested under the trust for any act or omission in relation to the trust property or the trustee's duty as a trustee except liability-

  1. arising from any breach of trust to which such trustee (or in the case of a corporate trustee any of its officers or employees) was a party or to which the trustee was privy;
  2. in respect of actions to recover from such trustee (or in the case of a corporate trustee any of its officers or employees) trust property or the proceeds of trust property in the possession of such trustee, officers or employees.

Protective trusts; class interests; and certain powers

35. Spendthrift Or Protective Trust

(1) The terms of a trust may make the interest of a beneficiary liable to termination.

(2) Without prejudice to the generality of paragraph (1), the terms of a trust may make the interest of a beneficiary in the income or capital of the trust property subject to –

  1. a restriction on alienation or disposal; or
  2. diminution or termination in the event of the beneficiary becoming bankrupt or any of his or her property becoming liable to sequestration for the benefit of his or her creditors.

(3) ……….[Deleted]

(4) ……….[Deleted]

36. Class Interests

(1) Subject to the terms of a trust, the following rules shall apply where a trust or an interest under a trust is in favour of a class of persons –

Rule 1:

A class closes when it is no longer possible for any other person to become a member of the class.

Rule 2:

A woman who is over the age of 55 years shall be deemed to be no longer capable of bearing a child.

Rule 3:

Where any class interest relates to income and for any period there is no member of the class in existence the income shall be accumulated and, subject to Article 15, shall be retained until there is a member of the class in existence or the class closes.

(2) In this Article "class interest" means a trust or an interest under a trust which is in favour of a class of persons.

37. Variation Of Terms Of A Trust

Without prejudice to any power of the court to vary the terms of a trust, a trust may be varied in any manner provided by its terms.

38. Power Of Accumulation And Advancement

(1) Subject to Article 15, the terms of a trust may direct or authorize the accumulation for any period of all or part of the income of the trust.

(2) Subject to paragraph (3), income of the trust which is not accumulated under paragraph (1) shall be distributed.

(3) Subject to the terms of the trust and subject to any prior interests or charges affecting the trust property, where a beneficiary is a minor and whether or not the beneficiary's interest –

  1. is a vested interest; or
  2. is an interest which will become vested –

    1. on attaining the age of majority,
    2. at any later age, or
    3. upon the happening of any event,

the trustee may –

  1. accumulate the income attributable to the interest of such beneficiary pending the attainment of the age of majority or such later age or the happening of such event;
  2. apply such income or part of it to or for the maintenance, education or other benefit of such beneficiary;
  3. advance or appropriate to or for the benefit of any such beneficiary such interest or part of such interest.

(4) The receipt of a parent or the lawful guardian of a beneficiary who is a minor shall be a sufficient discharge to the trustee for a payment made under paragraph (3).

(5) Subject to the terms of the trust and subject to any prior interests or charges affecting the trust property, the trustee may advance or apply for the benefit of a beneficiary part of the trust property prior to the date of the happening of the event upon the happening of which the beneficiary becomes entitled absolutely thereto.

(6) Any part of the trust property advanced or applied under paragraph (5) shall be brought into account in determining from time to time the share of the beneficiary in the trust property.

(7) No part of the trust property advanced or applied under paragraph (5) shall exceed the presumptive, contingent or vested share of the beneficiary in the trust property.

39. Power Of Appointment

The terms of a trust may confer on the trustee or any other person power to appoint or assign all or any part of the trust property or any interest in the trust property to, or to trustees for the benefit of, any person, whether or not such person was a beneficiary of the trust immediately prior to such appointment or assignment.

40. Power Of Revocation

(1) A trust and any exercise of a power under a trust may be expressed to be –

  1. revocable whether wholly or partly; or
  2. capable of variation.

(2) No such revocation or variation shall prejudice anything lawfully done by a trustee in relation to a trust before the trustee receives notice of such revocation or variation.

(3) Subject to the terms of the trust, if it is revoked the trustee shall hold the trust property in trust for the settlor absolutely.

(4) Where a trust is partly revoked paragraph (3) shall apply to the property which is the subject of such revocation.

(5) In paragraph (3) "settlor" means the particular person who provided the property which is the subject of revocation.

41. Power To Provide For Change Of Proper Law

The terms of a trust may provide for the proper law of the trust to be changed from the law of Jersey to the law of another jurisdiction.

Failure, lapse and termination of trusts

42. Failure Or Lapse Of Interest

(1) Subject to the terms of a trust and subject to any order of the court, where –

  1. an interest lapses;
  2. a trust terminates;
  3. there is no beneficiary and no person who can become a beneficiary in accordance with the terms of the trust; or
  4. property is vested in a person which is not for his or her sole benefit and the trusts upon which he or she is to hold the property are not declared or communicated to the person,

the interest or property affected by such lapse, termination, lack of beneficiary or lack of declaration or communication of trusts shall be held by the trustee or the person referred to in sub-paragraph (d), as the case may be, in trust for the settlor absolutely or if he or she is dead for his or her personal representative.

(2) An application to the court under this Article may be made by the Attorney General.

(3) In paragraph (1) "settlor" means the particular person who provided the interest or property affected as mentioned in that paragraph.

43. Termination Of A Jersey Trust

(1) On the termination of a trust the trust property shall be distributed by the trustee within a reasonable time in accordance with the terms of the trust to the persons entitled thereto.

(2) Notwithstanding paragraph (1), the trustee may require to be provided with reasonable security for liabilities whether existing, future, contingent or otherwise before distributing trust property.

(3) Without prejudice to the powers of the court under paragraph (4) and notwithstanding the terms of the trust, where all the beneficiaries are in existence and have been ascertained and none are interdicts or minors they may require the trustee to terminate the trust and distribute the trust property among them.

(4) The court may –

  1. require the trustee to distribute the trust property;
  2. direct the trustee not to distribute the trust property; or
  3. make such other order as it thinks fit.

(5) In this Article "liabilities" includes contingent liabilities.

(6) An application to the court under this Article may be made by any person referred to in Article 51(3).

Powers of the court

44. Appointment Of Resident Trustee

(1) Where there is no trustee resident in Jersey a beneficiary may apply to the court for the appointment of a person nominated for the purpose in the application, who shall be a person who resides in Jersey, as an additional trustee.

(2) The court –

  1. upon being satisfied that notice of the application by the beneficiary has been served upon the trustees;
  2. having heard any representations made by the trustees or any other beneficiary; and
  3. having ascertained that the person nominated for the purpose in the application is willing to act; may make an order appointing such person as an additional trustee.

45. Power To Relieve Trustee From Personal Liability

(1) The court may relieve a trustee either wholly or partly from personal liability for a breach of trust where it appears to the court that –

  1. the trustee is or may be personally liable for the breach of trust;
  2. the trustee has acted honestly and reasonably;
  3. the trustee ought fairly to be excused –

    1. for the breach of trust, or
    2. for omitting to obtain the directions of the court in the matter in which such breach arose.

(2) Paragraph (1) shall apply whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Law.

46. Power To Make Beneficiary Indemnify For Breach Of Trust

(1) Where a trustee commits a breach of trust at the instigation or at the request or with the consent of a beneficiary, the court may by order impound all or part of the interest of the beneficiary by way of indemnity to the trustee or any person claiming through the trustee.

(2) Paragraph (1) applies whether or not such beneficiary is a minor or an interdict.

47. Variation Of Terms Of A Jersey Trust By The Court And Approval Of Particular Transactions

(1) Subject to paragraph (2), the court may, if it thinks fit, by order, approve on behalf of-

  1. a minor or interdict having, directly or indirectly, an interest, whether vested or contingent, under the trust;
  2. any person, whether ascertained or not, who may become entitled, directly or indirectly, to an interest under the trust as being at a future date or on the happening of a future event a person of any specified description or a member of any specified class of persons;
  3. any person unborn; or
  4. any person in respect of any interest of his or hers that may arise by reason of any discretionary power given to anyone on the failure or determination of any existing interest that has not failed or determined;

any arrangement, by whomsoever proposed and whether or not there is any other person beneficially interested who is capable of assenting thereto, varying or revoking all or any of the terms of the trust or enlarging the powers of the trustee of managing or administering any of the trust property.

(2) The court shall not approve an arrangement on behalf of any person coming within paragraph (1)(a), (b) or (c) unless the carrying out thereof appears to be for the benefit of that person.

(3) Where in the management or administration of a trust, any sale, lease, pledge, charge, surrender, release or other disposition, or any purchase, investment, acquisition, expenditure or other transaction is in the opinion of the court expedient but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the terms of the trust or by law the court may confer upon the trustee either generally or in any particular circumstances a power for that purpose on such terms and subject to such provisions and conditions, if any, as the court thinks fit and may direct in what manner and from what property any money authorized to be expended and the costs of any transaction are to be paid or borne.

(4) An application to the court under this Article may be made by any person referred to in Article 51(3).

47A Trusts For Charitable Or Non-Charitable Purposes

(1) Where trust property is held for a charitable or non-charitable purpose and any of the circumstances mentioned in paragraph (2) apply, the court may, on the application of a trustee or the Attorney General, declare that the property or the remainder of the property, as the case may be, shall be held for such other charitable or non-charitable purpose, as the case may be, as the court considers to be consistent with the original intention of the settlor.

(2) The circumstances are that –

  1. the purpose has, as far as is reasonably possible, been fulfilled, has ceased to exist or is no longer applicable;
  2. the purpose cannot be carried out having regard to the directions given by the settlor or the spirit of the gift;
  3. the purpose provides a use for only part of the trust property;
  4. the property, and any other property applicable for a similar purpose, can more effectively be applied to a common purpose, regard being had to the spirit of the gift;
  5. the purpose was laid down by reference to an area that is no longer a unit for that purpose, or by reference to a class of persons or to an area that is no longer appropriate, regard being had to the spirit of the gift or the practicality of administering the gift;
  6. the purpose has been adequately provided for by other means;
  7. in the case of a trust for charitable purposes, the purpose has ceased for what ever reason to be charitable; or
  8. the purpose has ceased in any other way to provide a suitable and effective method of using the property, regard being had to the spirit of the gift.

(3) Where trust property is held for a charitable or non-charitable purpose the court may, on the application of a trustee or the Attorney General, approve any arrangement that varies or revokes the purposes of the trust or enlarges or modifies the powers of management or administration of the trustees, if it is satisfied that the arrangement –

  1. is suitable and expedient; and
  2. is consistent with the original intention of the settlor and the spirit of the gift.

(4) The court shall not approve an arrangement under paragraph (3) unless it is satisfied that any person with a material interest in the trust has had an opportunity to be heard.

PART 3 - PROVISIONS APPLICABLE TO A FOREIGN TRUST

48. Application Of Part 3

This Part of this Law shall apply only to a foreign trust.

49. Enforceability Of A Foreign Trust

(1) Subject to paragraph (2), a foreign trust shall be regarded as being governed by, and shall be interpreted in accordance with its proper law.

(2) A foreign trust shall be unenforceable in Jersey –

  1. to the extent that it purports –

    1. to do anything the doing of which is contrary to the law of Jersey,
    2. to confer any right or power or impose any obligation the exercise or carrying out of which is contrary to the law of Jersey, or
    3. to apply directly to immovable property situated in Jersey;
  2. to the extent that the court declares that the trust is immoral or contrary to public policy.

(3) Where paragraph (2)(a)(iii) applies, any person in whom the title to such immovable property is vested shall not be, and shall not be deemed to be, a trustee of such immovable property.

PART 4 - PROVISIONS OF GENERAL APPLICATION

50. Application Of Part 4

This Part of this Law shall apply to a Jersey trust and, to the extent that the context admits, shall apply to a foreign trust.

51. Applications To And Certain Powers Of The Court

(1) A trustee may apply to the court for direction concerning the manner in which the trustee may or should act in connection with any matter concerning the trust and the court may make such order, if any, as it thinks fit.

(2) The court may, if it thinks fit –

  1. make an order concerning –

    1. the execution or the administration of any trust,
    2. the trustee of any trust, including an order relating to the exercise of any power, discretion or duty of the trustee, the appointment or removal of a trustee, the remuneration of a trustee, the submission of accounts, the conduct of the trustee and payments, whether payments into court or otherwise,
    3. a beneficiary or any person having a connection with the trust, or
    4. the appointment or removal of an enforcer in relation to any noncharitable purposes of the trust;
  2. make a declaration as to the validity or the enforceability of a trust;
  3. rescind or vary any order or declaration made under this Law, or make any new or further order or declaration.

(3) An application to the court for an order or declaration under paragraph (2) may be made by the Attorney General or by the trustee, the enforcer or a beneficiary or, with leave of the court, by any other person.

(4) Where the court makes an order for the appointment of a trustee it may impose such conditions as it thinks fit, including conditions as to the vesting of trust property.

(5) Subject to any order of the court, a trustee appointed under this Article shall have the same powers, discretions and duties and may act as if the trustee had been originally appointed as a trustee.

52. Execution Of Instruments By Order Of The Court

Where any person neglects or refuses to comply with an order of the court directing the person to execute or make any conveyance, assignment, or other document or instrument or endorsement, for giving effect to any order of the court under this Law, the court may, on such terms and conditions, if any, as may be just, order that the conveyance, assignment, or other document or instrument or endorsement, shall be executed, made or done by such person as the court nominates for the purpose, at the cost of the person in default, or otherwise, as the court directs, and a conveyance, assignment, document, instrument or endorsement so executed, made or done shall operate and be for all purposes available as if it had been executed, made or done by the person originally directed to execute, make or do it.

53. Payment Of Costs

The court may order the costs and expenses of and incidental to an application to the court under this Law to be raised and paid out of the trust property or to be borne and paid in such manner and by such persons as it thinks fit.

54. Nature Of Trustee's Estate, Following Trust Property And Insolvency Of Trustee

(1) Subject to paragraph (2) –

  1. the interest of a trustee in the trust property is limited to that which is necessary for the proper performance of the trust; and
  2. such property shall not be deemed to form part of the trustee's assets.

(2) Where a trustee is also a beneficiary of the same trust, paragraph (1) shall not apply to the trustee's interest in the trust property as a beneficiary.

(3) Without prejudice to the liability of a trustee for breach of trust, trust property which has been alienated or converted in breach of trust or the property into which it has been converted may be followed and recovered unless it is in the hands of a bona fide purchaser for value without notice of a breach of trust or a person (other than the trustee) deriving title through such a person.

(4) Where a trustee becomes insolvent or upon distraint, execution or any similar process of law being made, taken or used against any of the trustee's property, the trustee's creditors shall have no right or claim against the trust property except to the extent that the trustee himself or herself has a claim against the trust or has a beneficial interest in the trust.

55. Protection To Persons Dealing With Trustee

(1) A bona fide purchaser for value without actual notice of any breach of trust –

  1. may deal with a trustee in relation to trust property as if the trustee was the beneficial owner of the trust property; and
  2. shall not be affected by the trusts on which such property is held.

(2) No person paying or advancing money to a trustee shall be concerned to see that such money is wanted, or that no more than is wanted is raised, or otherwise as to the propriety of the transaction or the application of the money.

[56. Repealed: Liability Of Directors Of A Corporate Trustee]

57. Limitation Of Actions Or Prescription

(1) No period of limitation or prescription shall apply to an action brought against a trustee –

  1. in respect of any fraud to which the trustee was a party or to which the trustee was privy; or
  2. to recover from the trustee trust property –

    1. in the trustee's possession,
    2. under the trustee's control, or
    3. previously received by the trustee and converted to the trustee's use.

(2) Save as provided in paragraph (1), the period within which an action founded on breach of trust may be brought against a trustee by a beneficiary or an enforcer is –

  1. 3 years from the delivery of the final accounts of the trust to the beneficiary or the enforcer; or
  2. 3 years from the date on which the beneficiary or the enforcer first has knowledge of the occurrence of a breach of trust, whichever period shall first begin to run.

(3) Where the beneficiary is a minor the period referred to in paragraph (2) shall not begin to run before the day on which the beneficiary ceases to be a minor.

(3A) Save as provided in paragraph (1), the period within which an action founded on breach of trust may be brought against a former trustee by a current trustee is 3 years from the date on which the former trustee ceased to be a trustee of the trust.

(4) This Article does not apply to a foreign trust whose proper law is the law of a jurisdiction to which the Convention on the law applicable to trusts and on their recognition, signed at The Hague on 20th October 1984, for the time being extends.

PART 5 - SUPPLEMENTAL

58. Application Of This Law

Subject to Article 59, this Law shall apply to trusts constituted or created either before or after the commencement of this Law.

59. Saving Provisions

(1) Nothing in this Law shall –

  1. abridge or affect the powers, responsibilities or duties under any provision of law of the Viscount or any curator, tuteur, or special and general attorney;
  2. affect the legality or validity of anything done before the commencement of this Law in relation to a trust existing before the commencement of this Law; or
  3. affect the legality or validity of any trust arising from a document or disposition executed or taking effect before the commencement of this Law.

(2) Nothing in this Law shall derogate from the powers of the court which exist independently of this Law –

  1. to set aside or reduce any transfer or other disposition of property;
  2. to vary any trust;
  3. to reduce or vary any testamentary or other disposition;
  4. to make an order relating to matrimonial proceedings; or
  5. to make an order relating to the avoidance of fraud on creditors.

(3) Nothing in this Law shall derogate from the provisions of –

  1. the Loi (1862) sur les teneures en fidéicommis et l'incorporation d'associations;
  2. the Mental Health (Jersey) Law 1969;
  3. the Sharing of Church Buildings (Jersey) Law 1973.

(4) Nothing in this Law shall affect a personal representative where he or she is acting as such.

60. Rules Of Court

The power to make rules of court under the Royal Court (Jersey) Law 1948 shall include a power to make rules for the purposes of this Law and proceedings thereunder.

61. Citation

This Law may be cited as the Trusts (Jersey) Law 1984.

This document has been prepared by Carey Olsen using information made available electronically by the Jersey Legal Information Board ("JLIB"). This information is provided by JLIB and in turn by Carey Olsen as information only. This document is not the official or authorised version of the consolidated legislation. No warranty is given that the information it contains is error free or has no omissions. No liability is accepted for any loss howsoever caused whether due to negligence or otherwise arising from the use of the document or the information provided.

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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This article is part of a series: Click Trusts (Jersey) Law 1984 - Section 1 for the previous article.
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    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions