The passage of recent legislation by The Bahamas legislature seeks to further enhance the law relating to trusts, in the following manner: -
The Trust (Choice of Governing Law) Act, 1989 is expressly designed to confront issues over the jurisdiction and conflict of laws in relation to trusts; for example, the forced heirship provisions in civil law countries. The principal thrust of this Act is to make Bahamian Law the governing law of the trust if so expressly declared. Accordingly, all matters of interpretation and administration fall to be decided in accordance with the law of The Bahamas, and, further, such a trust may not be rendered void, voidable or be liable to be set aside or defective in any manner by reference to a foreign law. This Act also allows a trust to provide that its governing law may be changed, whether to or from The Bahamas.
The Fraudulent Dispositions Act, 1991 - trusts have always been vulnerable to laws against dispositions of property by way of gift, or at an undervalue, with an intent to defraud. This Act offers relief on two fronts. Firstly, it shifts the burden of proving an intent to defraud on behalf of the donor onto the party trying to set aside the disposition. Secondly, after the passage of Two (2) years, a disposition may not be set aside on this ground. Among those who benefit from the provisions of this Act are persons engaged in high risk vocations, such as doctors, who wish to protect their personal and family assets from the reaches of any professional liability they may incur by divesting themselves of the assets to be so protected, and placing them into a trust. Indeed, in these recessionary times, asset protection offers itself to all those engaged in business.
The International Business Companies Act, 1989 - companies incorporated under this Act ("IBCs") can be usefully combined with the trust as the vehicle for investing and holding investments. (See Client memorandum on IBCs)
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.
