The new Trusts Act is the culmination of an exhaustive study of the trusts legislation of many other jurisdictions. The decision was taken to repeal the existing trusts legislation and replace it with a completely new Ordinance, rather than attempt to amend it.
The Trusts Ordinance, which has its roots in English trust law, provides a framework so flexible that the only limitation to its use is the imagination of the trust practitioner. Specifically, the Ordinance permits commercial or charitable purpose trusts, unit trusts, spendthrift trusts, asset protection trusts and what are termed variant trusts. The provision for variant trusts permits a settlor to create a trust (in whatever form and by whatever name) of a type recognized by the law or rules of his religion or nationality or which is customarily used by his community.
The Ordinance provides for a protector of the trust (who may be the trustee). The protector may be provided with the power to remove the trustee and to appoint new or additional trustees.
The Rule Against Perpetuities has been abolished and accumulation of income throughout the full term of a trust is possible.
The Fraudulent Dispositions Ordinance provides that a fraudulent disposition is voidable by a creditor provided that the settlor was insolvent at the time of the disposition or became so as a result thereof and provided that the creditor commences his action within three years of the date that the assets were settled into trust. The burden of proving that the settlor was or became insolvent as a result of the transfer is on the creditor.
In relation to asset (or creditor) protection trusts, therefore, Anguilla has deliberately taken a more conservative approach than some jurisdictions.
Where a trust is created under the laws of Anguilla, the Court shall not vary it, set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the Order of another Court in respect of:
- marriage or its termination;
- succession rights;
- the claims of creditors in an insolvency;
- the imposition of any foreign tax or duty.
Other characteristics of an Anguilla trust include choice of governing law and flight provisions.
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.