September 23, 2020

Consultation opens in Cayman Islands on Law of Trusts

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Trust Law Consult Continues Through 30 June

Following upon recent developments in the law of trusts in other jurisdictions, the Law Reform Commission has been asked to consider to what extent the Trusts Law (2011 Revision) could benefit from amendment.

The Commission believes the Law has served this jurisdiction well and that it is in no need of drastic overhaul. The Commission notes the recent amendments to the Law which deal with certain matters falling within a fairly narrow compass. The review of the Law by the Commission is wider and the areas of trusts currently being examined to determine whether any reform is needed include the codification of the duties of trustees, the Hastings Bass rule, judicial and extra-judicial variation of trusts and the use of mediation and arbitration in trust disputes.

The Consultation Paper will be published on www.gov.ky as well as on www.lawreformcommission.gov.ky (or www.lrc.gov.ky). Members of the public are invited to submit their comments on the Consultation Paper and submissions should be made no later than 30th June, 2017. Comments should be posted to the Cheryl Neblett, Director, Law Reform Commission, P.O. Box 1999 KY1-1104, delivered by hand to the offices of the Commission at 4th Floor Government Administration Building or sent by e-mail to [email protected]

The Following Introduction is taken from TRUSTS LAW REFORM Discussion Paper
Wednesday, April 05, 2017:

The Cayman Islands Law Reform Commission
Chairman: Mr. Kenneth Farrow, QC
Members: Ms. Cheryll Richards, QC Ms. Jacqueline Wilson, QC Mrs. Eileen Nervik, QC Mr. Hector Robinson, QC Mr. Vaughan Carter
Director: Ms. Cheryl Ann Neblett
Senior Legislative Counsel: Mr. José Griffith
Administrative secretary: Mrs. Kimberly Allen

Trusts Law Reform Discussion Paper
Section I – Introduction
1. Following upon recent developments in the law of trusts in other jurisdictions, the Law Reform Commission has been asked to consider to what extent the Trusts Law (2011 Revision) (“the Law”) could benefit from amendment. The Trusts (Amendment) Law, 2016 (“the Amendment Law”) is now in force but that deals principally with correcting inconsistencies in the transitional provisions of earlier trusts legislation and certain other matters falling within a fairly narrow compass.
2. Generally, we believe the Law has served this jurisdiction well and that it is in no need of drastic overhaul. Nevertheless, there are certain discrete areas where, with a view to remaining competitive as an off-shore trusts jurisdiction, we need to consider possible amendments. To the extent that amendments are proposed, an ancillary question arises as to whether those amendments should be retrospective, that is, apply both to trusts established before as well as after the amendments come into effect. There is no problem with those amendments which are only prospective since all those involved, the settlor, the trustees and, to the extent that they could have any cause for complaint, the beneficiaries, must take the law as they find it. To the extent that the amendments are retrospective, consideration needs to be given to the question whether those amendments do or may prejudice the interests of existing beneficiaries and, if so, whether such prejudice or possible prejudice can be justified1. In the event, with one exception, we do not believe that any of the possible amendments which we have considered do prejudice the interests of existing beneficiaries, we give below our reasons for that belief in respect of each of the areas considered.
3. In preparing this paper we have had regard to the trusts legislation of England and Wales,2 Jersey,3 Guernsey4, Bermuda,5 the British Virgin Islands,6 and the Bahamas7.
4. We consider in the following paragraphs the areas where there might be room for improvement.

1 A half-way house, which has some legislative precedent in the Islands, is to give the trustees of existing trusts power to adopt the amending legislation: see Part X of the Law (introduced by section 10 of the Amendment Law). This effectively shifts the decision-making from the legislature to the trustees. 2 Variation of Trusts Act 1958; 2000.
3 Trust (Jersey) Law, 1984 (as revised as at 1 January 2014). 4 The Trusts (Guernsey) Law, 2007. 5 Trustee Act, 1975 (as revised as at 27 October 2016). 6 Trustee Ordinance, 1961, as amended by the Trustee (Amendment) Acts 1993 and 2003. 7 Trustee Act 1998, as amended by the Trustee (Amendment) Acts 2011 and 2016.

Section I – Introduction
Section II – Codification of Trustees’ duties
Section III – The Hastings Bass Rule
Section IV – Judicial Variation of Trusts
Section V – Extra-Judicial Variation of Trusts
Section VI – Dispute Resolution
Section VII-The Law, Section 6(c)
Section VIII- The Law, Section 91(b)
Section IX- Miscellaneous

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