Trusts and statutory regimes under Jersey law

Trust arrangements recognized by the law

The statute describes a trust as property held by a trustee for a beneficiary, a purpose, or both. A beneficiary need not yet be identified or exist when the trust is created. Jersey law recognizes trusts as valid and enforceable subject to the statute.^[1]

A trust's terms may grant powers that affect how trustees exercise their authority, including a requirement for another person's consent.^[1]

A trust may reserve or grant specified powers to the settlor or another person. The listed powers include directing property transactions, appointing or removing trustees and beneficiaries, and changing the trust's proper law. The statute says that reserving or granting such powers does not by itself make the settlor or power holder a trustee.^[1]

The statute recognizes charitable purposes and also provides a route for non-charitable purpose trusts. A purpose trust without a beneficiary is invalid to that extent unless its terms provide for an enforcer and for appointing a replacement whenever none is in office.^[1]

Trustees, beneficiaries and enforcers

A trustee holds or has vested in the trustee property that the trustee does not own in their own right. The legislation requires an enforcer for a trust's non-charitable purposes, and assigns that enforcer the duty to enforce the trust in relation to those purposes. A person cannot act as both trustee and enforcer of the same trust's non-charitable purposes.^[1]

Beneficiaries hold interests under the trust. The statute treats a beneficiary's interest as movable property and allows a beneficiary, subject to the trust terms, to deal with that interest. It also allows the trust terms to provide for a beneficiary's addition, exclusion or conditional benefit.^[1]

The statute requires at least one trustee for a trust. Trustees carry out administration under the statute and the trust's terms.^[1]

Duration and accumulation

Unless the trust terms set a different rule, a Jersey trust may continue for an unlimited period. The statute disapplies rules against perpetuities and excessive accumulations to trusts and to specified dealings with trust assets.^[1]

For a class interest relating to income, the statute provides for accumulation during a period when no class member exists. The income is retained until a member exists or the class closes, subject to the duration provision.^[1]

U.S. reporting context

A U.S. person who creates, transfers property to, or receives a distribution from a foreign trust such as a Jersey trust may need to file IRS Form 3520, and a foreign trust with a U.S. owner generally files Form 3520-A.^[1]

In more detail

The statutory definition focuses on the trustee's relationship to the property: the trustee holds property of which the trustee is not the owner in the trustee's own right. The arrangement may be for beneficiaries or for a purpose beyond the trustee's own benefit.^[2]

The law addresses more than the trust's creation. It covers questions of validity and interpretation, transfers of property, a settlor's capacity, and the administration of the trust, including trustee powers, duties, rights, appointment and removal.^[2]

Unless the terms provide otherwise, a Jersey trust may continue for an unlimited period. The statute also says rules against perpetuities and excessive accumulations do not apply.^[2]

Key points

A trust instrument can set a duration different from the unlimited period that applies by default.^[2]

A trust created for a specified non-charitable purpose without ascertainable beneficiaries has a separate enforcer responsible for enforcement.^[3]

A trust's terms can provide for its proper law to change from Jersey law to another jurisdiction's law.^[2]

Related reading

Jersey Courts and Trust Legal System connects Jersey's principal trust legislation with court powers. Jersey information exchange and U.S. trust reporting addresses reporting topics. Jersey trust taxation and U.S. reporting covers tax topics. Trust types under Nevis legislation offers a comparison with another jurisdiction's trust rules.

Questions and answers

Related resources

Related glossary terms

• Enforcer: An enforcer is a person given a role in relation to certain trusts. Jersey and Cayman law describe how enforcers are appointed, with their duties and rights.
• Unit trust: The Jersey Trusts Law defines a unit trust by its purpose or effect of giving investors participation as beneficiaries in profits or income from property.

Related articles and guides

• Jersey Courts and Trust Legal System: Jersey's trust statute gives its courts defined powers and sets proper law rules, with the limits the statute itself states. Written for U.S. citizens.
• Trust types and duration under Seychelles law: Seychelles law recognizes beneficiary and purpose trusts, with rules on trustees and settlors and on trust duration, set out by statute for each trust type.
• Trust types under Nevis legislation: Nevis legislation describes trust forms and the rules for their purposes and participants, plus duration and income. The Trusts Act defines a trust itself.

Related pages

• Jersey: overview: Start page for this jurisdiction.
• Trust legislation
• Trustee regulation and licensing
• Taxation of trusts
• Reporting and information exchange