Trusts (Jersey)
Law 1984
A LAW to make provision with regard to trusts, trustees and persons
interested under trusts and for connected purposes
Commencement
[see endnotes]
PART 1
general
1 Interpretation
(1) In
this Law, unless the context otherwise requires –
“beneficiary” means
a person entitled to benefit under a trust or in whose favour a discretion to
distribute property held on trust may be exercised;
“breach of trust” means
a breach of any duty imposed on a trustee by this Law or by the terms of the
trust;
“corporate trustee” means
a trustee which is a corporation;
“corporation” means
a body corporate wherever incorporated;
“court” means the
Inferior Number of the Royal Court;
“enforcer” shall be
construed in accordance with Article 13;[1]
“foreign trust” means
a trust whose proper law is the law of some jurisdiction other than Jersey;
“insurance” includes
assurance;
“interdict” means a person,
other than a minor, who under the law of Jersey or under the law of the person’s
domicile does not have legal capacity;
“interest of a beneficiary”
means the beneficiary’s interest under a trust and references to the
beneficiary’s interest have a corresponding meaning;
“Jersey trust” means
a trust whose proper law is the law of Jersey;
“minor” means a person
who under the law of Jersey or under the law of the person’s domicile has
not reached the age of legal capacity;
“personal representative”
means the executor or administrator for the time being of a deceased person
and, in the context of a Jersey trust, includes the principal heir;
“property” means
property of any description wherever situated, and, in relation to rights and
interests includes those rights and interests whether vested, contingent,
defeasible or future;
“settlor” means a person
who provides trust property or makes a testamentary disposition on trust or to
a trust;
“terms of a trust” means
the written or oral terms of a trust, and also means any other terms made
applicable by the proper law;
“trust”
includes –
(a) the
trust property; and
(b) the
rights, powers, duties, interests, relationships and obligations under a trust;
“trust property” means
the property for the time being held in a trust;
“unit trust” means
any trust established for the purpose, or having the effect, of providing, for
persons having funds available for investment, facilities for the participation
by them as beneficiaries under the trust, in any profits or income arising from
the acquisition, holding, management or disposal of any property whatsoever.
(2) This Law shall not be
construed as a codification of laws regarding trusts, trustees and persons
interested under trusts.
2 Existence
of a trust
A trust exists where a person (known as a trustee) holds or has
vested in the person or is deemed to hold or have vested in the person property
(of which the person is not the owner in the person’s own
right) –
(a) for
the benefit of any person (known as a beneficiary) whether or not yet
ascertained or in existence;
(b) for
any purpose which is not for the benefit only of the trustee; or
(c) for
such benefit as is mentioned in sub-paragraph (a) and also for any such
purpose as is mentioned in sub-paragraph (b).
3 Recognition
of a trust by the law of Jersey
Subject to this Law, a trust shall be recognized by the law of Jersey
as valid and enforceable.
4 Proper law of a trust
(1) Subject
to Article 41, the proper law of a trust shall be the law of the
jurisdiction –
(a) expressed
by the terms of the trust as the proper law; or failing that
(b) to
be implied from the terms of the trust; or failing either
(c) with
which the trust at the time it was created had the closest connection.[2]
(2) The
references in paragraph (1) to “failing that” or
“failing either” include references to cases –
(a) where
no law is expressed or implied under sub-paragraph (a) or (b) of that paragraph;
and
(b) where
a law is so expressed or implied, but that law does not provide for trusts or
the category of trusts concerned.[3]
(3) In
ascertaining, for the purpose of paragraph (1)(c), the law with which a
trust had the closest connection, reference shall be made in particular
to –
(a) the
place of administration of the trust designated by the settlor;
(b) the
situs of the assets of the trust;
(c) the
place of residence or business of the trustee;
(d) the
objects of the trust and the places where they are to be fulfilled.[4]
5 Jurisdiction
of court
The court has jurisdiction where –
(a) the
trust is a Jersey trust;
(b) a
trustee of a foreign trust is resident in Jersey;
(c) any
trust property of a foreign trust is situated in Jersey; or
(d) administration
of any trust property of a foreign trust is carried on in Jersey.
PART 2
PROVISIONS APPLICABLE ONLY TO A JERSEY TRUST
6 Application
of Part 2
This Part of this Law shall apply only to a Jersey trust.
Creation, validity and duration of Jersey
trusts
7 Creation
of a trust
(1) Subject
to paragraph (3), a trust may come into existence in any manner.
(2) Without
prejudice to the generality of paragraph (1), a trust may come into
existence by oral declaration, or by an instrument in writing (including a will
or codicil) or arise by conduct.
(3) A
unit trust may be created only by an instrument in writing.
8 Property
which may be placed in a trust
Subject to Article 11(2) –
(a) any
property may be held by or vested in a trustee upon trust; and
(b) a
trustee may accept from any person property to be added to the trust property.
9 Transfer
of property to a trust[5]
(1) Nothing
in the terms of a trust shall cause a transfer or disposition of property to a
trust to be invalidated by application of the rule donner
et retenir ne vaut.
(2) If
a person domiciled outside Jersey transfers or disposes of property during the person’s
lifetime to a trust –
(a) the
person shall be deemed to have had capacity to do so if the person is at the
time of such transfer or disposition of full age and of sound mind under the law
of the person’s domicile; and
(b) no rule
relating to inheritance or succession (including, but without prejudice to the
generality of the foregoing, forced heirship, légitime
or similar rights) of the law of the person’s domicile or any other
system of law shall affect any such transfer or disposition or otherwise affect
the validity of such trust.
(3) For
the avoidance of doubt it is declared that the provisions of this Article shall
apply notwithstanding any other provisions of this Law and shall apply only to
transfers or dispositions of property made to a trust after 21 July 1989,
but this declaration shall be without prejudice to the validity or otherwise of
transfers or dispositions made before that time.
(4) In
this Article –
(a) the
expressions donner et retenir ne vaut, and légitime have the meanings assigned to them by
Jersey customary law; and
(b) a
reference to forced heirship is a reference to a legal rule restricting the
right of a person to dispose of his or her property during his or her lifetime
so as to preserve such property for distribution at his or her death, or having
similar effect.
10 Beneficiaries of
a trust
(1) A
beneficiary shall be –
(a) identifiable
by name; or
(b) ascertainable
by reference to –
(i) a class, or
(ii) a relationship to
some person whether or not living at the time of the creation of the trust or
at the time which under the terms of the trust is the time by reference to
which members of a class are to be determined.
(2) The
terms of a trust may provide for the addition of a person as a beneficiary or
the exclusion of a beneficiary from benefit.
(3) Subject
to Article 30(10), the terms of a trust may impose upon a beneficiary an
obligation as a condition for benefit.[6]
(4) A
beneficiary may disclaim his or her whole interest.
(5) A
disclaimer under paragraph (4) shall be irrevocable.
(6) Subject
to the terms of the trust, a beneficiary may disclaim part of his or her
interest.
(7) Paragraph
(6) shall apply whether or not the beneficiary has received some benefit from his
or her interest.
(8) A
disclaimer shall be in writing.
(9) Subject
to the terms of the trust, a disclaimer made under paragraph (6) may be
temporary and, if so provided in the writing effecting the disclaimer, shall be
capable of revocation in the manner and under the circumstances therein
mentioned or referred to.
(10) The
interest of a beneficiary shall constitute movable property.
(11) Subject
to the terms of the trust, a beneficiary may sell, pledge, charge, transfer or
otherwise deal with his or her interest in any manner.
(12) A
settlor or a trustee of a trust may also be a beneficiary of the trust.
11 Validity of a Jersey
trust
(1) Subject
to paragraphs (2) and (3), a trust shall be valid and enforceable in
accordance with its terms.
(2) Subject
to Article 12, a trust shall be invalid –
(a) to
the extent that –
(i) it purports to do
anything the doing of which is contrary to the law of Jersey,
(ii) it purports to
confer any right or power or impose any obligation the exercise or carrying out
of which is contrary to the law of Jersey,
(iii) it purports to apply
directly to immovable property situated in Jersey, or
(iv) it is created for a
purpose in relation to which there is no beneficiary, not being a charitable
purpose;
(b) to
the extent that the court declares that –
(i) the trust was
established by duress, fraud, mistake, undue influence or misrepresentation or
in breach of fiduciary duty,
(ii) the trust is
immoral or contrary to public policy, or
(iii) the terms of the trust
are so uncertain that its performance is rendered impossible.[7]
(3) Where
a trust is created for 2 or more purposes of which some are lawful and others
are unlawful –
(a) if
those purposes cannot be separated the trust shall be invalid;
(b) where
those purposes can be separated the court may declare that the trust is valid
as to the purposes which are lawful.
(4) Where
a trust is partially invalid the court may declare what property is trust
property, and what property is not trust property.
(5) Where
paragraph (2)(a)(iii) applies, any person in whom the title to such immovable
property is vested shall not be, and shall not be deemed to be, a trustee of
such immovable property.
(6) Property
as to which a trust is wholly or partially invalid shall, subject to paragraph (5)
and subject to any order of the court, be held by the trustee in trust for the
settlor absolutely or if the settlor is dead for his or her personal
representative.
(7) In paragraph (6)
“settlor” means the particular person who provided the property as
to which the trust is wholly or partially invalid.
(8) An
application to the court under this Article may be made by any person referred
to in Article 51(3).
12 Trusts for non-charitable purposes[8]
A trust shall not be invalid to any extent by reason of Article 11(2)(a)(iv)
if the terms of the trust provide for the appointment of an enforcer in
relation to its non-charitable purposes, and for the appointment of a new
enforcer at any time when there is none.
13 Enforcers[9]
(1) It
shall be the duty of an enforcer to enforce the trust in relation to its
non-charitable purposes.
(2) The
appointment of a person as enforcer of a trust in relation to its
non-charitable purposes shall not have effect if the person is also a trustee
of the trust.
(3) Article 21(4)
shall apply to an enforcer as if the reference in sub-paragraph (b) of
that paragraph to “a trustee” were a reference to “an
enforcer” and the references in that sub-paragraph to the “trustee’s
trusteeship” and “such trusteeship” were both references to the
“enforcer’s appointment”.
14 Resignation or removal of enforcer[10]
(1) Subject
to paragraph (3), an enforcer may resign his or her office by notice in
writing delivered to the trustee.
(2) A
resignation takes effect on the delivery of notice in accordance with paragraph (1).
(3) A
resignation given in order to facilitate a breach of trust shall be of no
effect.
(4) An
enforcer shall cease to be enforcer of the trust in relation to its non-charitable
purposes immediately upon –
(a) the enforcer’s removal from office by
the court;
(b) the enforcer’s resignation becoming
effective;
(c) the coming into effect
of a provision in the terms of a trust under which the
enforcer is removed from office or otherwise
ceases to hold office; or
(d) the
enforcer’s appointment as a trustee of the trust.
15 Duration of a Jersey
trust
(1) Subject
to paragraph (2), a trust may continue until the 100th anniversary of the
date on which it came into existence and if not sooner terminated shall then
terminate.
(2) Paragraph
(1) shall not apply to a trust for a charitable purpose.
Appointment, retirement and discharge of
trustees
16 Number of
trustees
(1) Subject
to the terms of the trust, the number of trustees shall be not less than 2,
unless only one trustee was originally appointed.
(2) Where
there is no trustee or less than the number required under paragraph (1) a
trust shall not fail on that account.
17 Appointment out of court of new or additional trustee
(1) Where
the terms of a trust contain no provision for the appointment of a new or
additional trustee – the trustees for the time being or the last
remaining trustee or the personal representative or the liquidator of the last
remaining trustee may appoint a new or additional trustee.
(2) Subject
to the terms of the trust, a trustee appointed under this Article shall have
the same powers, discretions and duties and may act as if the trustee had been
originally appointed a trustee.
(3) A
trustee having power to appoint a new trustee who fails to exercise such power
may be removed from office by the court.
(4) On
the appointment of a new or additional trustee anything requisite for vesting
the trust property in the trustees for the time being of the trust shall be
done.
18 Prohibition of
renunciation after acceptance
(1) No person
shall be obliged to accept appointment as a trustee, but a person who knowingly
does any act or thing in relation to the trust property consistent with the
status of a trustee of that property shall be deemed to have accepted
appointment as a trustee.
(2) A person
who has not accepted and is not deemed to have accepted appointment as a
trustee may disclaim such appointment within a reasonable period of time after
becoming aware of it by notice in writing to the settlor or to the trustees.
(3) If
the settlor is dead or cannot be found and there are no other trustees a person
to whom paragraph (2) applies may apply to the court for relief from the person’s
appointment and the court may make such order as it thinks fit.
19 Resignation or
removal of trustee
(1) Subject
to paragraph (3), a trustee, not being a sole trustee, may resign his or
her office by notice in writing delivered to his or her co-trustees.
(2) A
resignation takes effect on the delivery of notice in accordance with paragraph (1).
(3) A
resignation –
(a) given
in order to facilitate a breach of trust; or
(b) which
would result in there being no trustee or fewer than the number of trustees
required under Article 16(1),
shall have no effect.
(4) A
trustee shall cease to be a trustee of the trust immediately upon –
(a) the
trustee’s removal from office by the court; or
(b) the
trustee’s resignation becoming effective; or
(c) the
coming into effect of a provision in the terms of a trust under which the
trustee is removed from office or otherwise ceases to hold office.
(5) A person
who ceases to be a trustee under this Article shall concur in executing all
documents necessary for the vesting of the trust property in the new or
continuing trustees.
20 Position of
continuing trustees on reduction in number of trustees
Subject to the terms of the trust, where the number of trustees
falls below the minimum number required under Article 16(1), the required
number of new trustees shall be appointed and until such minimum number is
reached the surviving or continuing trustees shall act only for the purpose of
preserving the trust property.
Duties of trustees
21 Duties of trustee
(1) A
trustee shall in the execution of his or her duties and in the exercise of his
or her powers and discretions –
(a) act –
(i) with due
diligence,
(ii) as would a
prudent person,
(iii) to the best of the
trustee’s ability and skill; and
(b) observe
the utmost good faith.
(2) Subject
to this Law, a trustee shall carry out and administer the trust in accordance
with its terms.
(3) Subject
to the terms of the trust, a trustee shall –
(a) so
far as is reasonable preserve the value of the trust property;
(b) so
far as is reasonable enhance the value of the trust property.[11]
(4) Except –
(a) with
the approval of the court; or
(b) as
permitted by this Law or expressly provided by the terms of the trust,
a trustee shall not –
(i) directly
or indirectly profit from the trustee’s trusteeship;
(ii) cause
or permit any other person to profit directly or indirectly from such
trusteeship; or
(iii) on
the trustee’s own account enter into any transaction with the trustees or
relating to the trust property which may result in such profit.
(5) A
trustee shall keep accurate accounts and records of the trustee’s
trusteeship.
(6) A
trustee shall keep trust property separate from his or her personal property
and separately identifiable from any other property of which he or she is a
trustee.
(7) A
trustee of a trust for non-charitable purposes shall, at any time when there is
no enforcer in relation to them, take such steps as may be necessary to secure
the appointment of a new enforcer.[12]
(8) Where
the trustee of a trust for non-charitable purposes has reason to believe that
the enforcer in relation to them is unwilling or refuses to act, or is unfit to
act or incapable of acting, the trustee shall apply to the court for the
removal of the enforcer and the appointment of a replacement.[13]
22 Duty of
co-trustees to act together
(1) Subject
to the terms of the trust, where there is more than one trustee all the
trustees shall join in performing the trust.
(2) Subject
to paragraph (3), where there is more than one trustee no power or
discretion given to the trustees shall be exercised unless all the trustees
agree on its exercise.
(3) The
terms of a trust may empower trustees to act by a majority but a trustee who
dissents from a decision of the majority of the trustees may require the
trustee’s dissent to be recorded in writing.
23 Impartiality of
trustee
Subject to the terms of the trust, where there is more than one
beneficiary, or more than one purpose, or at least one beneficiary and at least
one purpose, a trustee shall be impartial and shall not execute the trust for
the advantage of one at the expense of another.[14]
General powers of trustees
24 Powers of trustee
(1) Subject
to the terms of the trust and subject to the trustee’s duties under this Law,
a trustee shall in relation to the trust property have all the same powers as a
natural person acting as the beneficial owner of such property.
(2) A
trustee shall exercise the trustee’s powers only in the interests of the
beneficiaries and in accordance with the terms of the trust.
(3) The
terms of a trust may require a trustee to obtain the consent of some other person
before exercising a power or a discretion.
(4) A person
who consents as provided in paragraph (3) shall not by virtue of so doing
be deemed to be a trustee.
25 Delegation by
trustee
(1) A
trustee shall not delegate the trustee’s powers unless permitted to do so
by this Law or by the terms of the trust.
(2) Except
where the terms of the trust specifically provide to the contrary, a
trustee –
(a) may
delegate management of trust property to and employ investment managers whom
the trustee reasonably considers competent and qualified to manage the
investment of trust property; and
(b) may
employ accountants, advocates, attorneys, bankers, brokers, custodians,
investment advisers, nominees, property agents, solicitors and other
professional agents or persons to act in relation to any of the affairs of the
trust or to hold any of the trust property.
(3) A
trustee shall not be liable for any loss to the trust arising from a delegation
or appointment under paragraph (2) who, in good faith and without neglect,
makes such delegation or appointment or permits the continuation thereof.
(4) A
trustee may authorize a person referred to in paragraph (2) to retain any
commission or other payment usually payable in relation to any transaction.
26 Remuneration and
expenses of trustee
(1) Unless
authorized by –
(a) the
terms of the trust;
(b) the
consent in writing of all of the beneficiaries; or
(c) any
order of the court,
a trustee shall not be entitled to remuneration for his or her
services.
(2) A
trustee may reimburse himself or herself out of the trust for or pay out of the
trust all expenses and liabilities reasonably incurred in connection with the
trust.[15]
27 Power to
appropriate
Subject to the terms of the trust, a trustee may, without the
consent of any beneficiary, appropriate trust property in or towards
satisfaction of the interest of a beneficiary in such manner and in accordance
with such valuation as the trustee thinks fit.
28 Corporate trustee
acting by resolution
A corporate trustee may –
(a) act
in connection with a trust by a resolution of such corporate trustee or of its
board of directors or other governing body; or
(b) by
such a resolution appoint one or more of its officers or employees to act on
its behalf in connection with the trust.
29 Trustee may
refuse to make disclosure
Subject to the terms of the trust and subject to any order of the
court, a trustee shall not be required to disclose to any person, any document
which –
(a) discloses
the trustee’s deliberations as to the manner in which the trustee has
exercised a power or discretion or performed a duty conferred or imposed upon him
or her;
(b) discloses
the reason for any particular exercise of such power or discretion or
performance of duty or the material upon which such reason shall or might have
been based;
(c) relates
to the exercise or proposed exercise of such power or discretion or the
performance or proposed performance of such duty; or
(d) relates
to or forms part of the accounts of the trust,
unless, in a case to which sub-paragraph (d) applies, that person
is a beneficiary under the trust not being a charity, or a charity which is
referred to by name in the terms of the trust as a beneficiary under the trust
or the enforcer in relation to any non-charitable purposes of the trust.[16]
Liability for breach of trust
30 Liability for
breach of trust
(1) Subject
to this Law and to the terms of the trust, a trustee shall be liable for a
breach of trust committed by the trustee or in which the trustee has concurred.[17]
(2) A
trustee who is liable for a breach of trust shall be liable for –
(a) the
loss or depreciation in value of the trust property resulting from such breach;
and
(b) the
profit, if any, which would have accrued to the trust property if there had
been no such breach.[18]
(3) Where
there are 2 or more breaches of trust, a trustee shall not set off a gain from
one breach of trust against a loss resulting from another breach of trust.
(4) A
trustee shall not be liable for a breach of trust committed prior to the
trustee’s appointment, if such breach of trust was committed by some
other person.
(5) A
trustee shall not be liable for a breach of trust committed by a co-trustee
unless –
(a) the
trustee becomes aware or ought to have become aware of the commission of such
breach or of the intention of his or her co-trustee to commit a breach of
trust; and
(b) the
trustee actively conceals such breach or such intention or fails within a
reasonable time to take proper steps to protect or restore the trust property
or prevent such breach.
(6) A
beneficiary may –
(a) relieve
a trustee of liability to the beneficiary for a breach of trust;
(b) indemnify
a trustee against liability for a breach of trust.
(7) Paragraph
(6) shall not apply unless the beneficiary –
(a) has
legal capacity;
(b) has
full knowledge of all material facts; and
(c) is
not improperly induced by the trustee to take action under paragraph (6).
(8) Where
2 or more trustees are liable in respect of a breach of trust, they shall be
liable jointly and severally.
(9) A
trustee who becomes aware of a breach of trust to which paragraph (4)
relates shall take all reasonable steps to have such breach remedied.
(10) Nothing
in the terms of a trust shall relieve, release or exonerate a trustee from
liability for breach of trust arising from the trustee’s own fraud,
wilful misconduct or gross negligence.[19]
(11) This Article
is in addition to Article 56.
31 Trustee acting in
respect of more than one trust
(1) A
trustee acting for the purposes of more than one trust shall not, in the
absence of fraud, be affected by notice of any instrument, matter, fact or
thing in relation to any particular trust if the trustee has obtained notice of
it by reason of the trustee’s acting or having acted for the purposes of
another trust.
(2) A
trustee of a trust shall disclose to his or her co-trustee any interest which he
or she has as trustee of another trust, if any transaction in relation to the
first mentioned trust is to be entered into with the trustee of such other
trust.
32 Dealings by
trustee with other parties[20]
(1) Subject
to paragraph (2), where in any transaction or matter affecting a trust a
trustee informs another party to the transaction or matter that he or she is acting
as trustee, a claim by such other party in relation to that transaction or
matter shall extend only to the trust property.
(2) Nothing
in paragraph (1) shall affect the liability of a trustee for breach of
trust.
(3) Where
in any such transaction or matter as is referred to in paragraph (1), a
trustee fails to inform such other party that he or she is acting as trustee
and that party is otherwise unaware of it, the trustee shall –
(a) be
personally liable to such other party in respect thereof; and
(b) have
a right of recourse to the trust property by way of indemnity against such
personal liability.
33 Constructive
trustee
(1) Subject
to paragraph (2), where a person (in this Article referred to as a
constructive trustee) makes or receives any profit, gain or advantage from a
breach of trust the person shall be deemed to be a trustee of that profit,
gain, or advantage.
(2) Paragraph
(1) shall not apply to a bona fide purchaser of
property for value and without notice of a breach of trust.
(3) A person
who is or becomes a constructive trustee shall deliver up the property of which
the person is a constructive trustee to the person properly entitled to it.
(4) This
Article shall not be construed as excluding any other circumstances under which
a person may be or become a constructive trustee.
34 Position of
outgoing trustee[21]
(1) Subject
to paragraph (2), when a trustee resigns, retires or is removed, he or she
shall duly surrender trust property in his or her possession or under his or
her control.[22]
(2) A trustee
who resigns, retires or is removed may require to be provided with reasonable
security for liabilities whether existing, future, contingent or otherwise
before surrendering trust property.[23]
(3) A
trustee who resigns, retires or is removed and has complied with paragraph (1)
shall be released from liability to any beneficiary, trustee or person
interested under the trust for any act or omission in relation to the trust
property or the trustee’s duty as a trustee except liability –
(a) arising
from any breach of trust to which such trustee (or in the case of a corporate
trustee any of its officers or employees) was a party or to which the trustee
was privy;
(b) in
respect of actions to recover from such trustee (or in the case of a corporate
trustee any of its officers or employees) trust property or the proceeds of
trust property in the possession of such trustee, officers or employees .[24]
Protective trusts; class interests; and
certain powers
35 Spendthrift or
protective trust
(1) The
terms of a trust may make the interest of a beneficiary liable to termination.
(2) Without
prejudice to the generality of paragraph (1), the terms of a trust may
make the interest of a beneficiary in the income or capital of the trust
property subject to –
(a) a
restriction on alienation or disposal; or
(b) diminution
or termination in the event of the beneficiary becoming bankrupt or any of his
or her property becoming liable to sequestration for the benefit of his or her
creditors.
(3) A
trust under which the interest of a beneficiary is subject to restriction,
diminution or termination under paragraph (2) is a spendthrift or
protective trust.
(4) A
provision in the terms of a trust requiring the interest of a beneficiary in
trust property to be held upon a spendthrift or protective trust shall be
construed as a requirement that the interest of the beneficiary be subjected to
restriction, diminution or termination as mentioned in paragraph (2).
36 Class interests
(1) Subject
to the terms of a trust, the following rules shall apply where a trust or an
interest under a trust is in favour of a class of persons –
|
Rule 1
|
A class closes when it is no longer possible for any other person
to become a member of the class.
|
|
Rule 2
|
A woman who is over the age of 55 years shall be deemed to be no
longer capable of bearing a child.
|
|
Rule 3
|
Where any class interest relates to income and for any period
there is no member of the class in existence the income shall be accumulated
and, subject to Article 15, shall be retained until there is a member of
the class in existence or the class closes.
|
(2) In
this Article “class interest” means a trust or an interest under a
trust which is in favour of a class of persons.
37 Power to provide
for variation of terms of trust
(1) The
terms of a trust may be varied in any manner provided by its terms.
(2) This
Article is in addition to Article 47 (which provides for the variation of
the terms of a Jersey trust by the court).
38 Power of
accumulation and advancement
(1) Subject
to Article 15, the terms of a trust may direct or authorize the
accumulation for any period of all or part of the income of the trust.
(2) Subject
to paragraph (3), income of the trust which is not accumulated under paragraph (1)
shall be distributed.
(3) Subject
to the terms of the trust and subject to any prior interests or charges
affecting the trust property, where a beneficiary is a minor and whether or not
the beneficiary’s interest –
(a) is
a vested interest; or
(b) is
an interest which will become vested –
(i) on attaining the age
of majority,
(ii) at any later age,
or
(iii) upon the happening of
any event,
the trustee may –
(A) accumulate
the income attributable to the interest of such beneficiary pending the
attainment of the age of majority or such later age or the happening of such
event;
(B) apply
such income or part of it to or for the maintenance, education or other benefit
of such beneficiary;
(C) advance
or appropriate to or for the benefit of any such beneficiary such interest or part
of such interest.
(4) The
receipt of a parent or the lawful guardian of a beneficiary who is a minor
shall be a sufficient discharge to the trustee for a payment made under paragraph (3).
(5) Subject
to the terms of the trust and subject to any prior interests or charges
affecting the trust property, the trustee may advance or apply for the benefit
of a beneficiary part of the trust property prior to the date of the happening
of the event upon the happening of which the beneficiary becomes entitled
absolutely thereto.
(6) Any
part of the trust property advanced or applied under paragraph (5) shall
be brought into account in determining from time to time the share of the
beneficiary in the trust property.
(7) No part
of the trust property advanced or applied under paragraph (5) shall exceed
the presumptive, contingent or vested share of the beneficiary in the trust
property.
39 Power of
appointment
The terms of a trust may confer on the trustee or any other person
power to appoint or assign all or any part of the trust property or any
interest in the trust property to, or to trustees for the benefit of, any person,
whether or not such person was a beneficiary of the trust immediately prior to
such appointment or assignment.
40 Power of
revocation
(1) A
trust and any exercise of a power under a trust may be expressed to
be –
(a) revocable
whether wholly or partly; or
(b) capable
of variation.
(2) No
such revocation or variation shall prejudice anything lawfully done by a
trustee in relation to a trust before the trustee receives notice of such
revocation or variation.
(3) Subject
to the terms of the trust, if it is revoked the trustee shall hold the trust
property in trust for the settlor absolutely.
(4) Where
a trust is partly revoked paragraph (3) shall apply to the property which
is the subject of such revocation.
(5) In paragraph (3)
“settlor” means the particular person who provided the property
which is the subject of revocation.
41 Power to provide
for change of proper law
The terms of a trust may provide for the proper law of the trust to
be changed from the law of Jersey to the law of another jurisdiction.
Failure, lapse and termination of trusts
42 Failure or lapse
of interest
(1) Subject
to the terms of a trust and subject to any order of the court,
where –
(a) an
interest lapses;
(b) a
trust terminates;
(c) there
is no beneficiary and no person who can become a beneficiary in accordance with
the terms of the trust; or
(d) property
is vested in a person which is not for his or her sole benefit and the trusts
upon which he or she is to hold the property are not declared or communicated
to the person,
the interest or property affected by such lapse, termination, lack
of beneficiary or lack of declaration or communication of trusts shall be held
by the trustee or the person referred to in sub-paragraph (d), as the case
may be, in trust for the settlor absolutely or if he or she is dead for his or
her personal representative.
(2) Where
an interest or property is held by the trustee for a purpose which has ceased
to exist or is no longer applicable, that interest or property shall be held
for such other purpose as the court may declare to be consistent with the
original intention of the settlor. [25]
(3) In paragraphs (1)
and (2) “settlor” means the particular person who provided the
interest or property affected as mentioned in paragraph (1).
(4) An
application to the court under this Article may be made by the Attorney
General.
43 Termination of a Jersey
trust
(1) On
the termination of a trust the trust property shall be distributed by the
trustee within a reasonable time in accordance with the terms of the trust to
the persons entitled thereto.
(2) Notwithstanding
paragraph (1), the trustee may require to be provided with reasonable
security for liabilities whether existing, future, contingent or otherwise
before distributing trust property.[26]
(3) Without
prejudice to the powers of the court under paragraph (4) and
notwithstanding the terms of the trust, where all the beneficiaries are in
existence and have been ascertained and none are interdicts or minors they may
require the trustee to terminate the trust and distribute the trust property
among them.
(4) The
court may –
(a) require
the trustee to distribute the trust property;
(b) direct
the trustee not to distribute the trust property; or
(c) make
such other order as it thinks fit.
(5) In
this Article “liabilities” includes contingent liabilities.
(6) An
application to the court under this Article may be made by any person referred
to in Article 51(3).
Powers of the court
44 Appointment of
resident trustee
(1) Where
there is no trustee resident in Jersey a beneficiary may apply to the court for
the appointment of a person nominated for the purpose in the application, who
shall be a person who resides in Jersey, as an additional trustee.
(2) The
court –
(a) upon
being satisfied that notice of the application by the beneficiary has been
served upon the trustees;
(b) having
heard any representations made by the trustees or any other beneficiary; and
(c) having
ascertained that the person nominated for the purpose in the application is
willing to act,
may make an order appointing such person as an additional trustee.
45 Power to relieve
trustee from personal liability
(1) The
court may relieve a trustee either wholly or partly from personal liability for
a breach of trust where it appears to the court that –
(a) the
trustee is or may be personally liable for the breach of trust;
(b) the
trustee has acted honestly and reasonably;
(c) the
trustee ought fairly to be excused –
(i) for the breach of
trust, or
(ii) for omitting to
obtain the directions of the court in the matter in which such breach arose.
(2) Paragraph
(1) shall apply whether the transaction alleged to be a breach of trust
occurred before or after the commencement of this Law.
46 Power to make
beneficiary indemnify for breach of trust
(1) Where
a trustee commits a breach of trust at the instigation or at the request or
with the consent of a beneficiary, the court may by order impound all or part
of the interest of the beneficiary by way of indemnity to the trustee or any person
claiming through the trustee.
(2) Paragraph
(1) applies whether or not such beneficiary is a minor or an interdict.
47 Variation of
terms of a Jersey trust by the court and approval of particular transactions
(1) Subject
to paragraph (2), the court may, if it thinks fit, by order approve on
behalf of –
(a) a
minor or interdict having, directly or indirectly, an interest, whether vested
or contingent, under the trust;
(b) any
person, whether ascertained or not, who may become entitled, directly or
indirectly, to an interest under the trust as being at a future date or on the
happening of a future event a person of any specified description or a member
of any specified class of persons;
(c) any
person unborn; or
(d) any
person in respect of any interest of his or hers that may arise by reason of
any discretionary power given to anyone on the failure or determination of any
existing interest that has not failed or determined,
any arrangement, by whomsoever proposed and whether or not there is
any other person beneficially interested who is capable of assenting thereto,
varying or revoking all or any of the terms of the trust or enlarging the
powers of the trustee of managing or administering any of the trust property.
(2) The
court shall not approve an arrangement on behalf of any person coming within paragraph (1)(a),
(b) or (c) unless the carrying out thereof appears to be for the benefit of
that person.
(3) Where
in the management or administration of a trust, any sale, lease, pledge, charge,
surrender, release or other disposition, or any purchase, investment,
acquisition, expenditure or other transaction is in the opinion of the court
expedient but the same cannot be effected by reason of the absence of any power
for that purpose vested in the trustee by the terms of the trust or by law the
court may confer upon the trustee either generally or in any particular
circumstances a power for that purpose on such terms and subject to such
provisions and conditions, if any, as the court thinks fit and may direct in
what manner and from what property any money authorized to be expended and the
costs of any transaction are to be paid or borne.
(4) An
application to the court under this Article may be made by any person referred
to in Article 51(3).
PART 3
PROVISIONS APPLICABLE TO A FOREIGN TRUST
48 Application of Part
3
This Part of this Law shall apply only to a foreign trust.
49 Enforceability of
a foreign trust
(1) Subject
to paragraph (2), a foreign trust shall be regarded as being governed by, and
shall be interpreted in accordance with its proper law.
(2) A
foreign trust shall be unenforceable in Jersey –
(a) to
the extent that it purports –
(i) to do anything
the doing of which is contrary to the law of Jersey,
(ii) to confer any
right or power or impose any obligation the exercise or carrying out of which
is contrary to the law of Jersey, or
(iii) to apply directly to immovable
property situated in Jersey;
(b) to
the extent that the court declares that the trust is immoral or contrary to
public policy.
(3) Where
paragraph (2)(a)(iii) applies, any person in whom the title to such immovable
property is vested shall not be, and shall not be deemed to be, a trustee of
such immovable property.
PART 4
PROVISIONS OF GENERAL APPLICATION
50 Application of Part
4
This Part of this Law shall apply to a Jersey trust and, to the
extent that the context admits, shall apply to a foreign trust.
51 Applications to
and certain powers of the court
(1) A
trustee may apply to the court for direction concerning the manner in which the
trustee may or should act in connection with any matter concerning the trust
and the court may make such order, if any, as it thinks fit.
(2) The
court may, if it thinks fit –
(a) make
an order concerning –
(i) the execution or
the administration of any trust,
(ii) the trustee of
any trust, including an order relating to the exercise of any power, discretion
or duty of the trustee, the appointment or removal of a trustee, the remuneration
of a trustee, the submission of accounts, the conduct of the trustee and
payments, whether payments into court or otherwise,
(iii) a beneficiary or any person
having a connection with the trust, or
(iv) the appointment or
removal of an enforcer in relation to any non-charitable purposes of the trust;
(b) make
a declaration as to the validity or the enforceability of a trust;
(c) rescind
or vary any order or declaration made under this Law, or make any new or
further order or declaration.[27]
(3) An
application to the court for an order or declaration under paragraph (2)
may be made by the Attorney General or by the trustee, the enforcer or a
beneficiary or, with leave of the court, by any other person.[28]
(4) Where
the court makes an order for the appointment of a trustee it may impose such
conditions as it thinks fit, including conditions as to the vesting of trust
property.
(5) Subject
to any order of the court, a trustee appointed under this Article shall have
the same powers, discretions and duties and may act as if the trustee had been
originally appointed as a trustee.
52 Execution of
instruments by order of the court
Where any person neglects or refuses to comply with an order of the
court directing the person to execute or make any conveyance, assignment, or
other document or instrument or endorsement, for giving effect to any order of
the court under this Law, the court may, on such terms and conditions, if any,
as may be just, order that the conveyance, assignment, or other document or
instrument or endorsement, shall be executed, made or done by such person as
the court nominates for the purpose, at the cost of the person in default, or
otherwise, as the court directs, and a conveyance, assignment, document,
instrument or endorsement so executed, made or done shall operate and be for
all purposes available as if it had been executed, made or done by the person
originally directed to execute, make or do it.
53 Payment of costs
The court may order the costs and expenses of and incidental to an
application to the court under this Law to be raised and paid out of the trust
property or to be borne and paid in such manner and by such persons as it
thinks fit.
54 Nature of
trustee’s estate, following trust property and insolvency of trustee
(1) Subject
to paragraph (2) –
(a) the
interest of a trustee in the trust property is limited to that which is
necessary for the proper performance of the trust; and
(b) such
property shall not be deemed to form part of the trustee’s assets.
(2) Where
a trustee is also a beneficiary of the same trust, paragraph (1) shall not
apply to the trustee’s interest in the trust property as a beneficiary.
(3) Without
prejudice to the liability of a trustee for breach of trust, trust property
which has been alienated or converted in breach of trust or the property into
which it has been converted may be followed and recovered unless it is in the
hands of a bona fide
purchaser for value without notice of a breach of trust or a person (other than
the trustee) deriving title through such a person.[29]
(4) Where
a trustee becomes insolvent or upon distraint, execution or any similar process
of law being made, taken or used against any of the trustee’s property, the
trustee’s creditors shall have no right or claim against the trust
property except to the extent that the trustee himself or herself has a claim
against the trust or has a beneficial interest in the trust.
55 Protection to
persons dealing with trustee
(1) A bona fide
purchaser for value without actual notice of any breach of trust –
(a) may
deal with a trustee in relation to trust property as if the trustee was the
beneficial owner of the trust property; and
(b) shall
not be affected by the trusts on which such property is held.
(2) No person
paying or advancing money to a trustee shall be concerned to see that such
money is wanted, or that no more than is wanted is raised, or otherwise as to
the propriety of the transaction or the application of the money.
56 Liability of
directors of a corporate trustee
(1) This
Article applies to a corporate trustee which, being constituted or operated for
the purpose of acting as a trustee (whether or not it is also constituted or
operated for other purposes) –
(a) is
a trustee of a Jersey trust;
(b) is
resident in Jersey; or
(c) is
carrying on business in Jersey or from an address in Jersey.
(2) Where
a breach of trust has been committed by a corporate trustee to which this Article
applies, every person who at the time of the commission of the breach of trust
was a director of such corporate trustee shall be deemed to be a guarantor of
such corporate trustee in respect of any pecuniary damages and costs awarded by
the court against such corporate trustee in respect of such breach:
Provided always that the Court may relieve a director either wholly
or partly from personal liability as a guarantor of such corporate trustee
where it appears to the Court that the director ought fairly to be excused from
such liability, because –
(a) the
director has proved that he or she was not aware of such breach of trust being
contemplated or committed, and in being not so aware, was not behaving in a
reckless or negligent manner; or
(b) the
director expressly objected, and exercised such rights as he or she had by way
of voting power or otherwise as a shareholder, director or other officer of the
company so as to try to prevent the commission of such breach of trust.
(3) For
the purposes of paragraph (2) –
(a) “director”
includes a person occupying the position of director by whatever name called, a
person in accordance with whose directions or instructions the directors of the
corporation or of a corporation of which it is a subsidiary (or any of them)
are accustomed to act, and a person who either alone or with or through an
associate is entitled to exercise or control the exercise of one third or more
of the voting power at a general meeting of the corporation or of a corporation
of which it is a subsidiary;
(b) “subsidiary”
means a corporation in respect of which another corporation is entitled to
exercise or can control the exercise of one third or more of the voting power;
(c) where
used in this paragraph “associate” in relation to a person means
any relative, partner or other person who is, has been or may be influenced by
that person.
57 Limitation of
actions or prescription
(1) No
period of limitation or prescription shall apply to an action brought against a
trustee –
(a) in
respect of any fraud to which the trustee was a party or to which the trustee
was privy; or
(b) to
recover from the trustee trust property –
(i) in the
trustee’s possession,
(ii) under the
trustee’s control, or
(iii) previously received by the
trustee and converted to the trustee’s use.
(2) Save
as provided in paragraph (1), the period within which an action founded on
breach of trust may be brought against a trustee by a beneficiary or an
enforcer is –
(a) 3
years from the delivery of the final accounts of the trust to the beneficiary or the enforcer; or
(b) 3
years from the date on which the beneficiary or the enforcer first has knowledge of the
occurrence of a breach of trust,
whichever period shall first begin to run.[30]
(3) Where
the beneficiary is a minor the period referred to in paragraph (2) shall
not begin to run before the day on which the beneficiary ceases to be a minor.
(4) This
Article does not apply to a foreign trust whose proper law is the law of a
jurisdiction to which the Convention on the law applicable to trusts and on
their recognition, signed at The Hague on 20th October 1984, for the
time being extends.[31]
PART 5
SUPPLEMENTAL
58 Application of
this Law
Subject to Article 59, this Law shall apply to trusts
constituted or created either before or after the commencement of this Law.
59 Saving provisions
(1) Nothing
in this Law shall –
(a) abridge
or affect the powers, responsibilities or duties under any provision of law of
the Viscount or any curator, tuteur, or special
and general attorney;
(b) affect
the legality or validity of anything done before the commencement of this Law
in relation to a trust existing before the commencement of this Law; or
(c) affect
the legality or validity of any trust arising from a document or disposition
executed or taking effect before the commencement of this Law.[32]
(2) Nothing
in this Law shall derogate from the powers of the court which exist
independently of this Law –
(a) to
set aside or reduce any transfer or other disposition of property;
(b) to
vary any trust;
(c) to
reduce or vary any testamentary or other disposition;
(d) to
make an order relating to matrimonial proceedings; or
(e) to
make an order relating to the avoidance of fraud on creditors.
(3) Nothing
in this Law shall derogate from the provisions of –
(a) the
Loi
(1862) sur les teneures en fidéicommis et l’incorporation
d’associations;[33]
(b) the
Mental Health (Jersey) Law 1969;[34]
(c) the
Sharing of Church Buildings (Jersey)
Law 1973.[35]
(4) Nothing
in this Law shall affect a personal representative where he or she is acting as
such.
60 Rules of Court
The power to make rules of court under the Royal Court (Jersey) Law 1948[36] shall include a power to
make rules for the purposes of this Law and proceedings thereunder.
61 Citation
This Law may be cited as the Trusts (Jersey) Law 1984.