Jersey: Trust Law Round-Up

Last Updated: 6 April 2009
Article by Naomi Rive

Last year was an extremely significant year for the trust industry in Jersey with a number of trust cases coming before the courts in Jersey. This has resulted in a number of important judicial decisions which have not only clarified many of the issues facing Jersey trustees but are of interest to the offshore world generally. Space permits brief reference to only a couple of major issues which arose in 2008, namely fraud on the power, and the effect of foreign judgments on Jersey trusts.

Fraud on the Power?

In Re Bird Charitable Trust [2008] JLR 1 the Court gave some useful guidance on the concept of "Fraud on the Power", in the context of the anti-money laundering legislation. In essence a fraud on the power will occur where a trustee (or in certain circumstances a protector) exercises a power in an apparently valid way but with the intention of achieving a result which would have been outside its powers.

Thus, in Re Bird the Court had to consider whether an appointment of new non Jersey trustees by a new protector amounted to a fraud on the power in circumstances where that appointment had been made to facilitate the removal of trust assets from Jersey so as to avoid the restrictions of the Proceeds of Crime (Jersey) Law 1999, given that a Suspicious Activity Report had been filed by the previous trustees.

Perhaps surprisingly the Court concluded that the appointment did not amount to fraud on the power as the ultimate intention to remove control of the trust from the Jersey trustees was found not to be an unlawful intention. The position would have been different had the trust assets already been determined to be the proceeds of crime rather than the original trustees merely having suspicion that they might be the proceeds of crime.

Enforcement of English Matrimonial Decisions

2008 also saw the Royal Court defending the integrity of Jersey trusts in the face of foreign court orders (usually English matrimonial decisions) which purported to vary or affect the terms of a Jersey trust (Re IMK Family Trust [2008] JLC 136). This case (relating to the notorious English matrimonial proceedings in Mubarak v Mubarak) has quite rightly received considerable press comment since the Judgment in August last year.

It is sufficient for the purposes of this article to note that in recent years a pattern had developed of the Royal Court giving directions to Jersey trustees so as to give effect to English matrimonial judgments which took into account trust assets in determining an award to be made to a spouse even where that spouse was not a beneficiary under the trust.

In summary the position, following IMK Trust, is now that the Royal Court cannot and will not enforce judgments in English courts which purport to vary or alter a Jersey trust. Where however, the purported variation does not amount to an "alteration" (in the sense that it does not require the trustees to act outside their powers under the trust) the Royal Court can give directions to Jersey trustees to achieve the objectives of the English court, as the giving of directions does not in a technical sense amount to enforcement. Where however, the purported variation ordered by the English court does amount to an "alteration" the Royal Court has no jurisdiction to direct the trustees to act outside their powers.

These findings and rulings are likely to be of enormous significance in helping to support the integrity of Jersey trusts generally and particularly in the face of foreign matrimonial decisions which purport to look behind the Jersey trust structures in considering the nature of family assets.

Trust Law Amendments

From a legislative perspective 2008 was also a busy year and saw the commencement of a further review into the Trusts (Jersey) Law 1984 (the "Law"). In a Consultation Paper issued in July 2008 a number of amendments were proposed to the Law including the introduction of the long anticipated statutory non-possessory lien and limited third party contract rights which will, over time, help to reduce the need for chain indemnities. Such indemnities currently make the transfer of trusteeship unnecessarily cumbersome in a way that can only be viewed as detrimental to the growth of the local trust industry.

Purpose Trusts

The introduction of the concept of a purpose trust into Jersey law proved to be a great success and purpose trusts have subsequently been utilised in a wide variety of structures. With increased demand being seen for the use of private trust companies however questions have been raised as to what constitutes a 'valid' purpose in this context and, in particular, whether it includes the simple exercise of owning and holding assets such as the shares in a company. A positive response to this question would bring Jersey law into line with the position under Guernsey law and would secure the future of purpose trusts.

The extent to which a beneficiary is entitled to information relating to a Jersey law trust is once again up for debate. On this occasion the focus lies in considering whether the Law currently achieves the right balance between ensuring that trustees are accountable whilst at the same time allowing settlors a say in the level of information disclosed to young or vulnerable beneficiaries.


It will come as a surprise to many that despite using the term 'charity' twice and 'charitable' ten times, the Law offers no guidance as to the meaning of those words. At a time when an increasing number of high net worth individuals wish to establish structures for philanthropic giving such an omission could prove costly to the finance industry. The proposal to introduce a modern definition of charity in line with that adopted under English and Scottish law therefore is likely to generate considerable support.


As well as seeking to build upon the strength of Jersey's trusts law, 2009 is likely to see the introduction of the concept of private foundations into Jersey law. As highlighted in previous editions, a Jersey law foundation has many appealing characteristics which, when combined with Jersey's well established reputation for excellence and expertise in administering companies, trusts and limited partnerships, stands Jersey in good stead to develop into a leading jurisdiction for the incorporation and administration of foundations.

Based upon an article first published in the Law and Accountancy supplement of the Jersey Evening Post on 18 February 2009.

Naomi Rive is an Advocate within the Trusts Group in the Appleby Jersey office.

This article first appeared in the spring 2009 issue of Appleby Jersey's Finance newsletter.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

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.


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.


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.


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

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

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

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