The Cayman Islands has introduced new legislation that abolishes the rule against perpetuities for ordinary trusts, allowing them to continue indefinitely. This change does not apply to STAR trusts, which were already not subject to this rule.
Previously, Cayman Islands trusts were limited by a mandatory 150-year perpetuity period, requiring assets to be distributed within that time. However, the Perpetuities (Amendment) Act, 2024, which received Royal Assent on 15 August 2024, removes this restriction for new trusts, except those involving Cayman Islands land.
While the change is not retroactive, existing trusts can petition the Grand Court to extend their duration indefinitely. Additionally, foreign trusts of unlimited duration can now choose to be governed by Cayman Islands law.
This reform strengthens Cayman Islands' legal trust framework, offering greater flexibility for international clients and creating opportunities for long-term succession planning.
Originally published 3 September 2024
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