Trusts (Amendment No.4) (Jersey) Law 200601 Oct 2006
The Trusts (Amendment No.4) (Jersey) Law 2006 (the "Law") was registered on 20 October 2006 by the Royal Court and came into force on 27 October 2006. The Law introduces several important amendments to the Trusts (Jersey) Law 1984 (the "1984 Law") as highlighted below.
Article 9: minimises the impact of any rules of foreign law upon the creation or operation of a Jersey trust.
Article 9(4): no foreign judgment may be enforced by the Jersey courts if it is inconsistent with Article 9.
Settlor reserved powers
Article 9A: provides statutory authority for the creation of Jersey trusts with settlor reserved powers.
Article 10: enables the beneficiaries of a Jersey trust to disclaim a whole or part interest in the trust, either permanently or for any temporary period, regardless of the terms of the trust.
Article 15: provides that Jersey trusts may continue for an unlimited period and confirms that no rules of perpetuity apply to Jersey trusts.
Number of trustees
Article 16: permits a sole trustee of a Jersey trust unless its terms require a higher minimum number.
Appointment of trustee
Article 17: the statutory power of appointment of new trustees of a Jersey trust is extended to apply to cases where trustee appointment provisions in the trust have lapsed, failed or cannot be exercised.
Resignation of trustees
Article 19: simultaneous resignations of trustees of a Jersey trust resulting in there being no remaining trustees are ineffective. However, a resignation made to facilitate a breach of trust will no longer be ineffective; instead, by Article 30, the resigning trustee will remain liable for the breach so facilitated.
Article 25: enables a trustee of a Jersey trust to delegate the execution or exercise of any of his trusts and powers, including dispositive powers, and for further sub-delegation to be made.
Third party dealings
Article 32: clarifies the position where a third party is aware that he is transacting with a trustee, but has not been specifically informed of this by the trustee.
Article 35: confirms that any beneficiary’s interest can be made subject to diminution or termination.
Charitable/non-charitable purpose trusts
Article 47A: enables the courts to apply trust assets in specified circumstances where the original charitable or non-charitable purpose of a Jersey trust has become incapable of being practically achieved. As a result, article 42(2) is repealed.
Directors as guarantors
Article 56 of the 1984 Law is repealed. This is the article which made directors of any corporate trustee automatically liable as guarantors of any liability for breach of trust committed by that corporate trustee.
Article 57(3A): imposes a three year limitation period upon actions brought by a current trustee against a former trustee, the time running from the date when the former trustee ceased to be a trustee. This period is consistent with the statutory period already existing for other actions for breach of trust.