Amendments to the trusts law, which aim to provide greater certainty and clarity to clients by expanding the powers of the Grand Court to set aside mistakes by trustees without having to find a breach of fiduciary duty, are going to take effect on 14 June.
The amendments also give more flexibility to the court to make changes to a trust on behalf of minors or unborn children.
The amendments extend the definition of a trust corporation with regard to STAR trusts to all trusts for the purpose of discharging a retiring trustee.
The new clauses also provide more protection against the adverse impact of foreign law by applying the provisions of the Trusts Law to a foreign law that is linked not only to the settlor but also the beneficiary. The Trust Law (2018 Revision) was passed in April and gazetted on 15 May.
Amendments providing greater certainty and clarity to Cayman trusts law reaffirm the Cayman Islands’ position as a market-leading jurisdiction for the establishment and administration of sophisticated trust arrangements. Ogier Partner Anthony Partridge said the changes will modernise fundamental aspects of the law and reaffirm the Cayman Islands’ position as a market leading jurisdiction for the establishment and administration of sophisticated trust arrangements.
“Overall, these enhancements are a welcome addition to the trust offering of the Cayman Islands. An increase in the flexibility of the Courts’ powers to vary trusts and confirmation of its jurisdiction to correct mistakes is to be applauded, further affirming the Cayman Islands’ world-class trust regime,” he said.
“The modernisation of the firewall provisions is desirable and will likely reduce enforcement attempts, at least in the Cayman Islands, in connection with beneficiaries’ interests in Cayman discretionary trusts.”
The changes came at the recommendation of the Law Reform Commission which in 2017 reviewed the Trusts Law and compared it with corresponding legislation in the UK, Jersey, Guernsey, Bermuda, the British Virgin Islands and the Bahamas.