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Cayman Islands' promised trust amendment Bill may be enacted this year

Monday, 4 February, 2019

A consultation draft of the Cayman Islands' long-awaited trust amendment Bill is currently being circulated among industry practitioners, in preparation for enactment this year.

Financial services minister Tara Rivers announced the Bill at the STEP Cayman Conference last week, along with new regulations for private trust companies, and the commencement of the Limited Liability Partnership Law, 2017.

The existence of the draft trusts Bill was revealed by Grand Court Chief Justice Ian Kawaley. It is, in part, based on a discussion paper published by the Cayman Islands Law Reform Commission in April 2017.

Measures in the Bill are expected to include a judicial power to reverse trustees' mistakes (the Hastings-Bass rule), and a more flexible power replacing the existing requirement that an arrangement must be shown to be for the benefit of minors and unborn with the less onerous requirement of establishing 'no detriment', as has been done in the Bahamas and the British Virgin Islands.

Another likely reform concerns s91 of the existing Trusts Law, concerning settlors and the exclusion of foreign law provisions.

Cayman Islands’ trust law has been amended as recently as November 2016, with provisions relating to the discharging of trustees; trustees of STAR trusts; settlors' powers to appoint capital and income; and charitable trusts.

Sources