Following our coverage in the September 2016 newsletter, a
Consultation Response and Policy Paper has been released following
a three month consultation on the Trusts (Jersey) Law Act 1984. A
summary of the conclusions made in this paper are set out
Changes to be made
An amendment to Article 29 dealing with the provision of
information to beneficiaries. This will include that disclosure to
beneficiaries can be restricted or enlarged by the terms of the
trust with the trustee having discretion to refuse disclosure if
such refusal is considered in the best interests of the
beneficiaries as a whole. However, the principles of disclosure or
what exactly should be disclosed will not be specified.
The clarification of provisions in relation to the reservation
of powers by a settlor. The key clarifications to be made include
the addition of wording to reflect the multi-layered structuring of
many trusts, a new provision confirming that the holding of a
reserved power or interest does not of itself constitute the holder
a trustee and the insertion of a presumptive provision that
reserved powers cease to have effect on death, incapacity or
bankruptcy of a powerholder.
An extension of the indemnity provisions to cover lifetime
distributions and to enable individual officers and employees to
benefit from the indemnities and to permit them to directly enforce
them in certain circumstances.
Widening the options relating to accumulation and distribution
of trust income. The default position will be retaining income in
its character of income.
The addition of wording confirming a presumption that unless
specified otherwise, a trust will take effect upon the trust
property vesting in the trustee.
Increasing (to a limited extent) the court's power to vary
a trust where it is not possible to locate or consult all adult
Issues still to be considered
The need for a beneficiary at all times during the existence of
The legitimé (or forced heirship) provisions and whether
changes to them are required.
The confirmation of the appointment of a corporate trustee
The development of alternative trust structures such as the
Cayman Islands STAR or the BVIVISTA.
Issues not requiring changes to the Act
Trustees self-contracting in different capacities.
The court's further ability to vary trust or trust
In our view the most interesting change is the extension of the
indemnity provisions to expressly include employees and directors.
This is likely to be welcomed by trustees and insurers in
particular in giving clarity to this position which in practice
(due to indemnities given to directors and the directors and
officers insurance coverage) had always assumed to be the case.
Other changes are more of welcome clarification or in the case of
information, codifying the existing case law.
It is notable that the two most radical changes, namely the
arbitration possibility and insolvent trusts have not been
incorporated although these were also perhaps the most contentious.
In relation to insolvent trusts, Jersey is considering a separate
statutory regime to govern the insolvency of trust structures. Emma
Jordan, Head of Contentious Trusts at Taylor Wessing, has been
appointed a member of the working group consulting on the possible
statutory regime in relation to insolvent trusts.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
An assignment of rights under a contract is normally restricted to the benefit of the contract. Where a party wishes to transfer both the benefit and burden of the contract this generally needs to be done by way of a novation.
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).