17 March marked 10 years since the Trusts (Guernsey) Law, 2007, came into full effect. The legislation, which replaced the Trusts (Guernsey) Law, 1989, was designed to create a more flexible framework for the local trust industry and to provide better protection for both settlors and trustees.
Russell Clark, who heads up the trust and private wealth practice at Carey Olsen, said the legislation was ahead of its time when in came into force 10 years ago and that continued to be the case today.
Since its inception in 1989, the Guernsey Trusts Law has been extremely welcome and robust legislation that has helped to underpin the development of the fiduciary industry in Guernsey. We have continued to improve it and tweak it over time and are now seeing many of the changes introduced in 2008 being copied elsewhere. For example, Jersey is now looking to introduce a ‘non-possessory lien’ along the same lines of that which we introduced in the 2007 revision.
In addition to clarification around the position of retiring trustees which saw Guernsey create a ‘non-possessory lien’ over trust assets in favour of retiring trustees, other key changes brought in 10 years ago included the introduction of purpose trusts, a removal of limits on the length of a trust’s duration and clarification around the rights of beneficiaries to information.
Mr Clark added:
It is reassuring that our innovations of a decade ago are being adopted elsewhere, but we must continue to keep the legislation under review. We need to ensure that it remains fit for purpose and that it maintains a balance between the desires of settlors on the one hand and the rights of beneficiaries on the other.