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Jersey consults of further trusts amendments

The Jersey government is consulting on a Trusts (Amendment No.5) (Jersey) Law, which it hopes will be brought into force in 2007. It follows the introduction of the Trusts (Amendment No.4) (Jersey) Law in 2006, which included provision for settlor-reserved powers.

The changes currently under consideration include the insertion of a modern, flexible definition of a “charity” or “charitable purpose”, and the insertion of a provision into the stating that in relation to a non-charitable purpose trust, the mere holding of the shares of a company represents a valid purpose. This would be beneficial for a purpose trust holding the shares of an underlying private trust company.

Other proposed changes include:

· the introduction of a statutory lien in favour of trustees in respect of liabilities that the trustees would have been entitled to be reimbursed for, had they still been trustees. This would help clarify the position of former trustees when claims are made against them after their retirement.

· the re-statement of Article 21 of the Trusts (Jersey) Law 1984 insofar as it relates to a trustee’s duty in respect of investments, so as to more closely follow what is known as the “prudent investor” rule in the US and in a number of Caribbean jurisdictions.

It is also understood that consideration may be given to amending the principle by which beneficiaries are entitled to know they are beneficiaries of a particular trust, such that in respect of minor beneficiaries it would be possible to prevent them from being told they were beneficiaries should a settlor wish it. Such a change would reflect the law in a number of US states.

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