Trust types and duration under Seychelles law

How the Act defines trusts

The Act recognizes trusts for beneficiaries, for charitable or non-charitable purposes, or for both. A trust exists when a trustee holds property for one or more of those purposes, and the purpose cannot be solely for the trustee's benefit.^[1]

A person with legal capacity to contract may create a trust by providing property or by making a testamentary disposition. The settlor may also act as trustee, beneficiary, protector or enforcer, subject to the Act's restriction against being the sole beneficiary or trustee, with a stated lifetime exception for the sole beneficiary role.^[1]

A Seychelles trust is created in writing through either a declaration of trust executed by the original trustees or a trust deed executed by the settlor and original trustees. The trustees acknowledge that they hold or will hold the property under the trust terms.^[1]

The Act defines a purpose trust as one created to fulfill one or more non-charitable purposes, whether or not it also has beneficiaries. A charitable trust is defined as one created for one or more charitable purposes.^[1]

Beneficiaries and discretionary interests

A beneficiary must be identifiable by name or ascertainable through a class or relationship to a person. Trust terms may add or remove beneficiaries, exclude a beneficiary from benefit, or make a benefit conditional on an obligation.^[1]

The Act defines a beneficiary to include a person entitled to benefit under a trust or in whose favor a discretion to distribute trust property may be exercised. This definition accommodates interests where the terms leave distributions to trustee discretion.^[1]

A charitable trust may be discretionary. The Act also permits charitable purposes to benefit a section of the public and permits private benefit to one or more people or objects within a class, subject to the statutory definition of charitable purposes.^[1]

The Act lists relief of poverty, education, religion, health, arts, amateur sport, animal welfare, environmental protection and human rights among charitable purposes. It also includes other charitable purposes beneficial to the public.^[1]

Purpose trusts and enforcers

A trust for a purpose without identifiable or ascertainable beneficiaries is valid under the stated exceptions for charitable trusts and purpose trusts meeting specified conditions. For a purpose trust, the terms must provide for an enforcer for its non-charitable purposes and for appointing a replacement whenever none is in office.^[1]

The terms of a purpose trust must provide for one or more enforcers and for replacement appointments as needed. The trustee must take steps to secure appointment when no enforcer is in place for the relevant purposes.^[1]

An enforcer's statutory duty is to enforce a purpose trust in relation to its non-charitable purposes. For a charitable trust with an enforcer, the duty concerns the charitable purposes. The Act permits an enforcer also to be a settlor, beneficiary or protector.^[1]

The Act does not require a charitable trust to have an enforcer, but permits one. If a charitable trust has an enforcer, its terms provide for appointment of one or more people to enforce its charitable purposes.^[1]

Powers retained by the settlor

A settlor may reserve or grant powers without invalidating the trust. The listed powers include changing or revoking terms, directing or approving distributions, and appointing or removing trustees, enforcers, protectors or beneficiaries.^[1]

Other listed powers cover directing trustees on management of trust property, appointing professionals, changing the trust's proper law or administrative forum, and requiring another person's consent before a trustee exercises specified powers or discretions.^[1]

The Act states that reserving, granting or exercising a listed power or interest does not make its holder a trustee. Subject to the trust terms, it does not by itself impose a fiduciary duty on the holder.^[1]

Seychelles legislation settles whether a trust stays valid when the settlor keeps powers. It does not settle the U.S. result. A power to revoke, direct distributions back to the settlor, or veto trustee decisions may affect the trust's U.S. tax classification and related reporting obligations. The legal effect of retained control depends on the governing law and the facts.

Trustee roles and administration

A trustee holds trust property and exercises powers under the Act and the trust terms. The trustee's powers concerning trust property match those of its beneficial owner, subject to statutory duties and the terms of the trust.^[1]

The Act directs trustees to exercise their powers in the interests of beneficiaries and in accordance with the trust terms. Terms may require consent from other people before a trustee exercises a power or discretion.^[1]

Where a trust has multiple trustees, they generally join in administration and agree before exercising a power or discretion. The terms may allow them to act by majority, with a dissent recorded in writing.^[1]

A trust may have a protector. Subject to the trust terms, powers vested in a protector may include powers identified by the Act, while settlors and beneficiaries may also serve as protectors with the stated restrictions.^[1]

Duration and accumulation

Unless the trust terms provide otherwise, a Seychelles trust may continue for an indefinite period. The Act says no rule against perpetuities or excessive accumulations applies to a trust or to an advancement, appointment, distribution or application of trust assets.^[1]

A transfer of assets from one trust to another is valid even if the receiving trust may continue beyond the date when the first trust could terminate, unless the first trust's terms provide otherwise.^[1]

Trust terms may direct or authorize accumulation of all or part of trust income for any period, subject to the duration rule. Income not accumulated under that authority is to be distributed, subject to the Act's stated provisions.^[1]

For a minor beneficiary, a trustee may accumulate income attributable to that beneficiary's interest until majority, a specified age or an event that vests the interest. The trustee may instead apply income for the beneficiary's maintenance, education or other benefit, or advance part of the interest.^[1]

For a class interest in income, if no class member exists for a period, the income is accumulated and retained, subject to the duration section, until a member exists or the class closes.^[1]

Questions and answers

Related resources

Related glossary terms

• Reserved powers: Reserved powers are rights a settlor keeps, or gives to another person, under a trust. Trust laws address their validity and timing, and administration.
• Trust: The Hague Convention describes a trust as a relationship in which a settlor places assets under a trustee's control for beneficiaries or a specified purpose.
• Settlor: A settlor is associated with creating a trust or placing property into it.

Related articles and guides

• Trusts and statutory regimes under Jersey law: Trust arrangements recognized under Jersey law, the roles of the trustee and beneficiary as well as the enforcer, and the statutory duration rules for a trust.
• Trust types and statutory regimes in The Bahamas: The Bahamas Trustee Act covers express and discretionary trusts, while the Purpose Trusts Act sets rules for authorised purpose trusts and their stated terms.

Related pages

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