Enforcer

Role of the enforcer

A purpose trust has no beneficiaries who can hold the trustee to account, so the statute gives that standing to an enforcer. The choice of an independent enforcer therefore matters more than the choice of a beneficiary in an ordinary trust. An enforcer is a different office from a protector: the enforcer role comes from the purpose-trust statute and the instrument, while a protector's powers come from the instrument alone. Some laws bar one person from acting as both trustee and enforcer. Mauritius is an example.

Appointment and scope

Under the Cayman Islands Act, only people appointed as enforcers have standing to enforce a special trust. Appointment may follow the trust instrument or a court order. A trustee or enforcer may ask the court to appoint an enforcer in specified circumstances, including where a required appointment cannot readily be made or an enforcer with a duty to act is unable, unwilling or unfit.^[4]

Jersey law addresses a gap when a non-charitable purpose trust has no enforcer. The trustee is to take steps to secure a replacement. If the trustee has reason to believe the enforcer will not act, or cannot act, the trustee is to apply to court for removal and replacement.^[3]

Duties, rights and neighboring roles

In Cayman special trusts, standing may be granted as a right or a duty. Unless evidence shows a contrary intention, an enforcer is treated as having a fiduciary duty to act responsibly toward proper execution of the trust. A trustee, another enforcer or a person expressly authorized by the trust can bring an action to enforce that duty.^[4]

The Cayman Act distinguishes the enforcer from a beneficiary. A beneficiary of a special trust does not, solely by being a beneficiary, have standing to enforce it or an enforceable right against a trustee or enforcer. An enforcer may or may not be a beneficiary, and the appointment terms govern the enforcer's rights.^[4]

Subject to appointment terms, Cayman enforcers receive rights resembling those of beneficiaries of ordinary trusts, including rights to trust information and documents. In Jersey, an enforcer may request documents that relate to or form part of the trust accounts, subject to the trust terms and any court order; a trustee may refuse certain disclosure requests in specified circumstances.^[3][4]

Questions and answers

Related terms

• Purpose trust: A purpose trust holds property for purposes, not for beneficiaries, and relies on an enforcer. Bermuda and Jersey define it differently, as does Cayman.
• Corporate trustee: A corporate trustee is a corporation under Jersey law. The law explains how it acts for a trust and relates to an individual trustee or trust corporation.
• Charitable trust: A charitable trust holds property for charitable purposes, and trust laws relate it to purpose trusts and to the other categories of trust used in planning.
• Trustee: A trustee controls trust assets and manages, uses, or disposes of them for beneficiaries or a stated purpose under the trust terms and applicable law.

Related guides and articles

• Foundations and trusts: legal structure: Foundations and trusts have distinct legal structures and roles. Legal personality, who has control, and who owns the assets all vary by each jurisdiction.
• Protector powers, consent and duties: A trust protector is defined by the powers an instrument grants, including trustee removal and appointment, and by how governing law treats the protector role.
• Settlor, trustee and beneficiary roles: Trust structure and the roles of settlors and of trustees, and of beneficiaries, tied to the IRS instructions for Form 3520 that apply to U.S. citizens.

Related pages

• Glossary: All terms.
• Corporate trustee
• Discretionary trust
• IRS forms