Jersey: Ironing Out The Kinks: The Seventh Amendment To Jersey's Trust Law

The latest round of amendments to the Trusts (Jersey) Law 1984 was registered by the Royal Court of Jersey on 1 June, and will come into force seven days after that. The Trusts (Amendment No. 7) (Jersey) Law 2018, as it is now formally titled, will therefore be fully operational later this week on 8 June.

The purpose of this note is to provide a relatively succinct explanation of the main changes. In fact, it may be enough for some simply to note that there is nothing in the new legislation that should cause anyone to start frantically combing through their existing trusts to fix fresh problems. Quite the opposite in fact. The purpose of the seventh amendment is to provide some nips and tucks to parts of the existing law that have caused trustees and beneficiaries a few difficulties, or at least uncertainties, in the past.

On the assumption that readers may lose interest (or at least, get interrupted) between now and the end of this note, here are the highlights in our suggested descending order of importance.

Trustee security

The ability to seek protection prior to handing over trust assets is of understandable importance to trustees. A new Article 43A of the 1984 law bulks up the existing provisions to match current industry practice, as endorsed by STEP.

In particular, the 1984 law, in conferring a right to reasonable security for liabilities prior to transferring trust property, will now clearly apply both to changes of trusteeship and distributions to beneficiaries. And where such security takes the form of an indemnity (as it typically does), that indemnity may be provided not only to the trustee but also to related parties such as the officers and employees of the trustee and their respective successors, heirs, personal representatives and estates.

Disclosure to beneficiaries

Article 29 of the 1984 law will be restated in a clearer, more comprehensive fashion, bearing in mind two competing factors: the desirability of withholding information from certain beneficiaries and the need for beneficiaries generally to be able to hold trustees to account. Broadly speaking, the new article does not fundamentally change the legal position, but rather condenses into statutory format some of the existing case law on disclosure, of which there is plenty.

Probably the most significant provision, however, is the fact that the law will now clearly state that restrictions may be drafted into trust instruments limiting the extent of a beneficiary's rights to information on the trust, subject always to the power of the courts to order otherwise. Settlors who are worried about certain beneficiaries (say, younger family members, or those with a shaky track record of managing their personal finances) finding out about the funds potentially available to them at the wrong stage in their lives can take comfort from this. Similarly, even where beneficiaries are permitted to request disclosure of trust information, a trustee may decline where it is satisfied it is in the interests of one or more of the beneficiaries to refuse to do so.


Article 47 of the 1984 law already permitted the Jersey courts to approve proposed trust variations on behalf of minor and unborn beneficiaries where it would, in the courts' view, be in the interests of those beneficiaries to do so. The seventh amendment helpfully extends that regime to the provision of consent by the Jersey courts on behalf of persons who cannot be found, despite reasonable efforts, and also on behalf of any beneficiaries who, because they are part of such a large class, it would be unreasonable to have to contact.

Powers reserved to or granted by settlors

Article 9A of the 1984 receives some tweaks, making it clear that, from a Jersey perspective at least, it is possible to have a valid trust even if "all" (rather than just "any", as before) of that Article's list of powers are reserved to the settlor or granted to parties other than the trustee, and any such reservation or grant would not make that person a trustee. Furthermore, the presumption will be that trusts will have immediate effect, even where there is little for a trustee to do until the settlor's death because so many powers have been reserved by that settlor. The significance of this clarification is that in such cases, there will not be any need to comply with the execution formalities that are required for wills (and which could otherwise apply to the trust instrument as it is effectively a testamentary instrument).

Accumulation and advancement

In the context of accumulating trust income, Article 38 now provides more flexibility for trustees: it is possible now for trustees simply to retain income indefinitely, rather than having either to accumulate it and add it to capital or, alternatively, to pay it out. And unless otherwise provided, there is no time limit on the exercise of the relevant powers of capitalisation, retention or distribution.

For completeness, it may be of interest to note that the statutory powers of advancement have also been extended to allow the whole of a beneficiary's presumptive share to be advanced prior to the date on which he or she would otherwise have become absolutely entitled, as opposed to just part of it as was previously the case. But the statutory advancement regime does not see as much action as its English law counterpart (section 32 of the Trustee Act 1925); usually the terms of the trust will supply the necessary powers of advancement in any case. For that reason, we suspect this particular amendment will not be of great significance in most cases.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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