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Guernsey has approved a package of amendments to the Trusts (Guernsey) Law 2007 (the Trusts Law), aimed at maintaining its position as a leading international trusts jurisdiction. The reforms follow a detailed review by industry and government bodies and were approved by the States of Deliberation on 20 May 2026.
The changes do not amount to wholesale reform but represent a targeted modernisation of the existing framework, addressing practical issues and aligning the law with current market practice.
Key changes at a glance
Powers of settlors and protectors
The current presumption that powers held by settlors or third parties (such as protectors) are not fiduciary will be reversed.
Going forward, such powers will be treated as fiduciary unless the trust instrument states otherwise. This aligns Guernsey with international practice and removes uncertainty where power-holders perform mixed roles.
What this means:
Greater emphasis on careful drafting to ensure the intended nature of powers is clear.
Duration of trusts
The reforms clarify the application of the 100-year duration limit and confirm that it will not affect trusts moving to Guernsey from jurisdictions with unlimited duration.
A new power will also allow the Court to extend the duration of time-limited trusts.
What this means:
- Easier migration of trusts to Guernsey
- Reduced need for restructuring or “decanting”
Trustee appointment and continuity
The minimum number of trustees will be reduced from two to one (unless the trust provides otherwise).
New provisions will also allow for the automatic removal of trustees who lack capacity and clarify succession arrangements on death or removal.
What this means:
- Reduced risk of trusts becoming inoperable
- Streamlined administration in practice
Delegation and remuneration
Trustees will be able to delegate powers indefinitely, with simplified requirements for limited delegations.
Professional trustees will also be entitled to reasonable remuneration by default, unless the trust provides otherwise.
What this means:
Greater flexibility for trustees and fewer administrative hurdles where trust terms are silent.
Confidentiality and trustee protections
Confidentiality protections will be extended to other fiduciary office-holders such as protectors and enforcers.
The reforms will also:
- allow trustees to contract with themselves when acting for multiple trusts
- clarify the priority of third-party secured creditors over trustee liens
- Confirm trustees’ rights to require security before handing over trust assets
What this means:
Improved protection for trustees and greater certainty in transactions.
Income and capital treatment
The law will clarify how accrued income is treated and when it becomes capital.
What this means:
Greater certainty, particularly for cross-border tax planning.
Beneficiary rights to call for the termination of a trust
The rule allowing beneficiaries to terminate a trust will be restricted so that it only applies where the class of beneficiaries is closed and fixed.
What this means:
Greater protection for discretionary and hybrid trust structures.
Court powers and dispute resolution
The reforms also enhance the Court’s supervisory jurisdiction and dispute resolution framework by:
- expanding who can apply to the Court without first obtaining the leave of court (to now include all trust officials)
- clarifying limitation periods for claims
- broadening the use of mediation and arbitration
- enabling private hearings and anonymisation in appropriate cases
- restoring a more flexible version of the Hastings Bass rule
What this means:
More accessible, flexible and confidential mechanisms for resolving disputes and clarity on a trustee's ability to revisit earlier decisions in the event of unintended consequences.
Overall impact
Taken together, the reforms update the Trusts Law to reflect modern practice while preserving its core strengths, underlining Guernsey's continued focus on maintaining a competitive and commercially practical trusts regime.
For trustees, advisers and settlors, the changes offer:
- greater flexibility in structuring and administration
- improved legal clarity in key areas
- enhanced protections and dispute resolution options
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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