When section 83 A of the British Virgin Islands' Trustee Act came into effect in 2004 the jurisdiction was regarded as having the most sophisticated and well thought-out 'firewall' offering available, but, since then, the territory has arguably fallen behind some of its main competitors in this context. The technical amendments to section 83 A which took effect in July 2021 are aimed at improving the Territory's firewall offering, which is considered critical in the context of the establishment of international trusts.
Since trusts governed by the laws of the BVI usually have significant links with the laws of one or more other jurisdictions, it is essential for the jurisdiction to have adequate rules for resolving 'choice of law' questions relating to trusts. It is also essential for jurisdictions to have 'firewall provisions' insulating BVI trusts and trustees against what are known as 'forced heirship' claims. Such firewall provisions were initially aimed at protecting trusts against such claims, but, increasingly, they are now used to protect trusts against matrimonial claims; when clients and their advisers are involved in 'jurisdiction shopping', they consider the effectiveness of these provisions in the context of which jurisdiction to use to set up trusts.
Read the full article by Christopher McKenzie, published in Trusts & Trustees (Oxford University Press) here...
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