Legislative amendments to the Cayman Islands’ Trusts Law take effect from 14 June 2019. While the reforms do not represent a drastic overhaul of the Trusts Law, they introduce welcome improvements to ensure the Cayman Islands remains a leading offshore jurisdiction for the establishment, administration, and maintenance of trusts.
The legislative amendments1 are the latest in a series of revisions to the Trusts Law (2018 Revision) (the “Trusts Law”), which is the main source of legislation concerning trusts in the Cayman Islands. The reforms take effect from 14 June 2019 and, as part of a continual process of fine-tuning the Trusts Law, effect the following key changes:
- codifying the “Hastings-Bass” principle: providing a clear statutory framework to apply for relief where the trustee (or some other fiduciary) has made a mistake in the exercise of their powers;
- extra-judicial variation of trusts: making it easier for the Grand Court to approve a variation to a trust on behalf of minor and unborn beneficiaries;
- compromise trust litigation: making it easier for the Grand Court to approve a compromise to a trust dispute on behalf of minor and unborn beneficiaries;
- foreign element provisions: extending the “firewall” or foreign element provisions which protect against a foreign law applying to a Cayman trust or foundation company; and
- trust corporations: widening the definition of a “trust corporation” to include licensed trust companies’ controlled subsidiaries and thereby widening the scope for such trustees to retire.
1 Cayman Islands Trusts (Amendment) Law 2019