Trusts (Amendment No. 4) (Jersey) Law 2006

Trusts (Amendment No. 4) (Jersey) Law 2006 Arrangement Article 1 Interpretation . 175 2 Article 9 replaced . 175 3 Article 10 amended . 177 4 Article 10A inserted . 178 5 Articles 15 and 16 substituted . 178 6 Article 17 amended . 179 7 Article 19 amended . 179 8 Article 20 repealed . 179 9 Article 25 amended . 179 10 Article 30 amended . 179 11 Article 32 replaced . 180 12 Article 35 amended . 180 13 Article 37 substituted . 180 14 Article 42 amended . 180 15 Article 47A inserted . 181 16 Article 56 repealed . 182 17 Article 57 amended . 182 18 Citation and commencement 182 Trusts (Amendment No. 4) (Jersey) Law 2006 A LAW to amend further the Trusts (Jersey) Law 1984. Adopted by the States 25th April 2006 Sanctioned by Order of Her Majesty in Council 10th October 2006 Registered by the Royal Court 20th October 2006 THE STATES , subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law – 1 Interpretation In this Law “principal Law” means the Trusts (Jersey) Law 1984 [1] . 2 Article 9 replaced For Article 9 of the principal Law there shall be substituted the following Articles – “9 Extent of application of law of Jersey to creation, etc of a trust (1) Subject to paragraph (3), any question concerning – (a) the validity or interpretation of a trust; (b) the validity or effect of any transfer or other disposition of property to a trust; (c) the capacity of a settlor; (d) the administration of the trust, whether the administration be conducted in Jersey or elsewhere, including questions as to the powers, obligations, liabilities and rights of trustees and their appointment or removal; or (e) the existence and extent of powers, conferred or retained, including powers of variation or revocation of the trust and powers of appointment and the validity of any exercise of such powers, shall be determined in accordance with the law of Jersey and no rule of foreign law shall affect such question. (2) Without prejudice to the generality of paragraph (1), any question mentioned in that paragraph shall be determined without consideration of whether or not – (a) any foreign law prohibits or does not recognise the concept of a trust; or (b) the trust or disposition avoids or defeats rights, claims, or interests conferred by any foreign law upon any person by reason of a personal relationship to the settlor or by way of heirship rights, or contravenes any rule of foreign law or any foreign judicial or administrative order or action intended to recognize, protect, enforce or give effect to any such rights, claims or interests. (3) The law of Jersey relating to – (a) légitime; and (b) conflicts of law, shall not apply to the determination of any question mentioned in paragraph (1) unless the settlor is domiciled in Jersey. (4) No foreign judgement with respect to a trust shall be enforceable to the extent that it is inconsistent with this Article irrespective of any applicable law relating to conflicts of law. (5) The rule donner et retenir ne vaut shall not apply to any question concerning the validity, effect or administration of a trust, or a transfer or other disposition of property to a trust. (6) In this Article – ‘foreign’ refers to any jurisdiction other than Jersey; ‘heirship rights’ means rights, claims or interests in, against or to property of a person arising or accruing in consequence of his or her death, other than rights, claims or interests created by will or other voluntary disposition by such person or resulting from an express limitation in the disposition of his or her property; ‘ légitime ’ and ‘ donner et retenir ne vaut ’ have the meanings assigned to them by Jersey customary law; ‘personal relationship’ includes the situation where there exists, or has in the past existed, any of the following relationships between a person and the settlor – (a) any relationship by blood, marriage or adoption (whether or not the marriage or adoption is recognised by law) (b) any arrangement between them such as to give rise in any jurisdiction to any rights, obligations or responsibilities analogous to those of parent and child or husband and wife; or (c) any personal relationship between the person or the settlor and a third person who in turn has a personal relationship with the settlor or the person as the case may be. (7) Despite Article 59, this Article applies to trusts whenever constituted or created. 9A Powers reserved by settlor (1) The reservation or grant by a settlor of a trust of – (a) any beneficial interest in the trust property; or (b) any of the powers mentioned in paragraph (2), shall not affect the validity of the trust nor delay the trust taking effect. (2) The powers are – (a) to revoke, vary or amend the terms of a trust or any trusts or powers arising wholly or partly under it; (b) to advance, appoint, pay or apply income or capital of the trust property or to give directions for the making of such advancement, appointment, payment or application; (c) to act as, or give binding directions as to the appointment or removal of, a director or officer of any corporation wholly or partly owned by the trust; (d) to give binding directions to the trustee in connection with the purchase, retention, sale, management, lending, pledging or charging of the trust property or the exercise of any powers or rights arising from such property; (e) to appoint or remove any trustee, enforcer, protector or beneficiary; (f) to appoint or remove an investment manager or investment adviser; (g) to change the proper law of the trust; (h) to restrict the exercise of any powers or discretions of a trustee by requiring that they shall only be exercisable with the consent of the settlor or any other person specified in the terms of the trust. (3) Where a power mentioned in paragraph (2) has been reserved or granted by the settlor, a trustee who acts in accordance with the exercise of the power is not acting in breach of trust. (4) The States may make Regulations amending paragraph (2).”. 3 Article 10 amended Paragraphs (4) to (9) of Article 10 of the principal Law shall be repealed. 4 Article 10A inserted After Article 10 of the principal Law there shall be inserted the following Article – “10A Disclaimer of interest (1) Despite the terms of the trust, a beneficiary may disclaim, either permanently or for such period as he or she may specify, the whole or any part of his or her interest under a trust if he or she does so in writing. (2) Paragraph (1) applies whether or not the beneficiary has received any benefit from the interest. (3) Subject to the terms of the trust, if the disclaimer so provides it may be revoked in accordance with its terms.”. 5 Articles 15 and 16 substituted For Articles 15 and 16 of the principal Law there shall be substituted the following Articles – “15 Duration of a Jersey trust (1) Unless its terms provide otherwise, a trust may continue in existence for an unlimited period. (2) No rule against perpetuities or excessive accumulations shall apply to a trust or to any advancement, appointment, payment or application of assets from a trust. (3) Except where the terms of a trust provide to the contrary, any advancement, appointment, payment or application of assets from that trust to another trust shall be valid even if that other trust may continue after the date by which the first trust must terminate. 16 Number of trustees (1) Subject to the terms of the trust, a trust must have at least one trustee. (2) A trust shall not fail on grounds of having fewer trustees than required by this Law or the terms of the trust. (3) If the number of trustees falls below the minimum number required by paragraph (1) or, if greater, by the terms of the trust, the required number of new trustees must be appointed as soon as practicable. (4) While there are fewer trustees than are required by the terms of the trust, the existing trustees may only act for the purpose of preserving the trust property.”. 6 Article 17 amended For Article 17(1) of the principal Law there is substituted the following paragraphs – “(1) Paragraph (1A) applies if – (a) the terms of a trust do not provide for the appointment of a new or additional trustee; (b) any such terms providing for any such appointment have lapsed or failed; or (c) the person who has the power to make any such appointment is not capable of exercising the power, and there is no other power to make the appointment. (1A) A new or additional trustee may be appointed by – (a) the trustees for the time being; (b) the last remaining trustee; or (c) the personal representative or liquidator of the last remaining trustee.”. 7 Article 19 amended For Article 19(3) of the principal Law there shall be substituted the following paragraph – “(3) If two or more trustees purport to resign simultaneously, the effect of which would mean that there would be no trustee, the resignations shall have no effect.”. 8 Article 20 repealed Article 20 of the principal Law shall be repealed. 9 Article 25 amended In Article 25 of the principal Law – (a) for paragraph (1) there shall be substituted the following paragraph – “(1) Subject to the terms of the trust, a trustee may delegate the execution or exercise of any of his or her trusts or powers (both administrative and dispositive) and any delegate may further so delegate any such trusts or powers.”; (b) in paragraph (3) for the words “paragraph (2)” there shall be substituted the words “this Article”. 10 Article 30 amended After Article 30(3) of the principal Law there is inserted the following paragraph – “(3A) A trustee who resigns in order to facilitate a breach of trust shall be liable for that breach as if he or she had not resigned.”. 11 Article 32 replaced For Article 32 of the principal Law there shall be substituted the following Article – “32 Trustee’s liability to third parties (1) Where a trustee is a party to any transaction or matter affecting the trust – (a) if the other party knows that the trustee is acting as trustee, any claim by the other party shall be against the trustee as trustee and shall extend only to the trust property; (b) if the other party does not know that the trustee is acting as trustee, any claim by the other party may be made against the trustee personally (though, without prejudice to his or her personal liability, the trustee shall have a right of recourse to the trust property by way of indemnity). (2) Paragraph (1) shall not affect any liability the trustee may have for breach of trust.”. 12 Article 35 amended Article 35(3) and (4) of the principal Law shall be deleted. 13 Article 37 substituted For Article 37 of the principal Law there shall be substituted the following Article – “37 Variation of terms of a trust Without prejudice to any power of the court to vary the terms of a trust, a trust may be varied in any manner provided by its terms.”. 14 Article 42 amended For Article 42(2) to (4) of the principal Law there shall be substituted the following paragraphs – “(2) An application to the court under this Article may be made by the Attorney General. (3) In paragraph (1) ‘settlor’ means the particular person who provided the interest or property affected as mentioned in that paragraph.”. 15 Article 47A inserted After Article 47 of the principal Law there shall be inserted the following Article – “47A Trusts for charitable or non-charitable purposes (1) Where trust property is held for a charitable or non-charitable purpose and any of the circumstances mentioned in paragraph (2) apply, the court may, on the application of a trustee or the Attorney General, declare that the property or the remainder of the property, as the case may be, shall be held for such other charitable or non-charitable purpose, as the case may be, as the court considers to be consistent with the original intention of the settlor. (2) The circumstances are that – (a) the purpose has, as far as is reasonably possible, been fulfilled, has ceased to exist or is no longer applicable; (b) the purpose cannot be carried out having regard to the directions given by the settlor or the spirit of the gift; (c) the purpose provides a use for only part of the trust property; (d) the property, and any other property applicable for a similar purpose, can more effectively be applied to a common purpose, regard being had to the spirit of the gift; (e) the purpose was laid down by reference to an area that is no longer a unit for that purpose, or by reference to a class of persons or to an area that is no longer appropriate, regard being had to the spirit of the gift or the practicality of administering the gift; (f) the purpose has been adequately provided for by other means; (g) in the case of a trust for charitable purposes, the purpose has ceased for what ever reason to be charitable; or (h) the purpose has ceased in any other way to provide a suitable and effective method of using the property, regard being had to the spirit of the gift. (3) Where trust property is held for a charitable or non-charitable purpose the court may, on the application of a trustee or the Attorney General, approve any arrangement that varies or revokes the purposes of the trust or enlarges or modifies the powers of management or administration of the trustees, if it is satisfied that the arrangement – (a) is suitable and expedient; and (b) is consistent with the original intention of the settlor and the spirit of the gift. (4) The court shall not approve an arrangement under paragraph (3) unless it is satisfied that any person with a material interest in the trust has had an opportunity to be heard.”. 16 Article 56 repealed Article 56 of the principal Law shall be repealed. 17 Article 57 amended After Article 57(3) of the principal Law there shall be inserted the following paragraph – “(3A) Save as provided in paragraph (1), the period within which an action founded on breach of trust may be brought against a former trustee by a current trustee is 3 years from the date on which the former trustee ceased to be a trustee of the trust.”. 18 Citation and commencement This Law may be cited as the Trusts (Amendment No. 4) (Jersey) Law 2006 and shall come into force 7 days after its registration. m.n. de la haye Greffier of the States [1] chapter 13.875