Cayman Islands perpetuities rule now in force

The Act came into force on 22 August 2024. Previously, ordinary trusts were governed by the Perpetuities Act (1999 Revision), which provided that they were constrained by a 150-year perpetuity period. Trust assets would have to be distributed within this time limit, failing which they would be void. Special trusts alternative regime trusts (STAR trusts) were exempt from this rule and so continue to be outside the scope of the Act.

Trusts established after the amendment has been brought into force can last indefinitely, rather than the previous limit of 150 years. Further, the Act allows non-Cayman Islands trusts of unlimited duration to adopt Cayman Islands law as their governing law.

The amendment does not automatically apply to trusts established before the Act comes into force; however, parties can apply to the Grand Court of the Cayman Islands (the Grand Court) for the rule to be disapplied or to extend the trust period duration.

For a pre-existing trust to request the disapplication of the rule, the application must be made by a trustee, settlor, enforcer or any person with powers or a beneficial interest under the trust. The Grand Court must be satisfied that the application is not detrimental to the trust beneficiaries and that it is not in relation to disposition of Cayman Islands land or an interest therein.

Sources

• Bedell Cristin
• Ogier
• Mourant
• Cayman Islands government (PDF)