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Bermuda Introduces Unprecedented Changes to Legislation on Settlor Reserved Powers

The reservation or grant of certain powers by settlors has always been possible under Bermuda’s trust legislation but historically, there has been some uncertainty about exactly how far settlors could go without calling the validity of the trust structure into question. The recently passed Trusts (Special Provisions) Amendment Act, 2014 (the “Amendment Act”) now provides statutory clarity and certainty in this area.

Helpfully, the Amendment Act expressly lists certain interests and powers which can be retained by a settlor or granted to a third party, for example, a protector or beneficiary, without prejudicing the validity of a trust. It also clarifies that the retention or grant of these powers and interests will not cause the property in the trust to become part of the settlor’s estate - introducing certainty in this area distinguishes Bermuda from some of the other major offshore jurisdictions.

 

To continue reading full articles in PDF format:
Bermuda Introduces Unprecedented Changes to Legislation on Settlor Reserved Powers

 


Alec R. Anderson
Director, Global Head of Private Client & Trust

Bermuda   +1 441 299 4945


Helen E. Cooper
Director

Bermuda   +1 441 299 4956


Nicola Bruce
Associate

Bermuda   +1 441 299 4936


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Alerts

Bermuda Introduces Unprecedented Changes to Legislation on Settlor Reserved Powers

The reservation or grant of certain powers by settlors has always been possible under Bermuda’s trust legislation but historically, there has been some uncertainty about exactly how far settlors could go without calling the validity of the trust structure into question. The recently passed Trusts (Special Provisions) Amendment Act, 2014 (the “Amendment Act”) now provides statutory clarity and certainty in this area.

Helpfully, the Amendment Act expressly lists certain interests and powers which can be retained by a settlor or granted to a third party, for example, a protector or beneficiary, without prejudicing the validity of a trust. It also clarifies that the retention or grant of these powers and interests will not cause the property in the trust to become part of the settlor’s estate - introducing certainty in this area distinguishes Bermuda from some of the other major offshore jurisdictions.

 

To continue reading full articles in PDF format:
Bermuda Introduces Unprecedented Changes to Legislation on Settlor Reserved Powers

 


Alec R. Anderson
Director, Global Head of Private Client & Trust

Bermuda   +1 441 299 4945


Helen E. Cooper
Director

Bermuda   +1 441 299 4956


Nicola Bruce
Associate

Bermuda   +1 441 299 4936


 

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Bermuda


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Bermuda