What is a flee clause?

If 'X' trigger event happens the trust assets, trusteeship and forum for the trust administration will automatically be transferred to another 'safe' jurisdiction.

What are we fleeing from?

Example trigger events:

  • Natural disaster
  • Breakdown of law and order
  • Imposition of government control or new taxation rules

COVID consequences?

Does your trust have a flee clause?

Potentially emergency powers enacted into law could adversely impact the ability of the trustees to administer the Trust Fund or carry out their powers and duties.

Is the disruption caused by current circumstances caught by the terms of a flee clause in the Trust Deed?

Keep calm and carry on

Flee or emergency clauses are fairly rare and largely untested.

It will be interesting to see if any clauses do exist which could be caught by the COVID situation and, if so, if the 'safe' jurisdiction is in fact itself caught.

In these uncertain times it is even more important for trustees to review the terms of their trusts, ensure they have robust minute and record keeping policies and review the strength of indemnity, exoneration and anti-Bartlett provisions.

Originally published 2 June, 2020

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.