On 24 October 2016, the following two laws were passed as welcome enhancements to the existing leading trust law of the Cayman Islands.

The Trusts (Amendment) Law, 2016

This law amends the Trusts Law (2011 Revision) (the "Trusts Law") to effect the following changes:

  • To remove the power to replace a trustee merely because the trustee has left the Cayman Islands for more than 12 months;
  • To resolve an arguably conflicting transitional provision which amended the Trusts Law in 1998 such that now, without doubt, section 6(c) of the Trusts Law applies to trusts created after 11 May 1998 or if the section is expressly extended to apply to the trust by deed executed by the trustees;
  • To insert a new subsection (3) into section 8 of the Trusts Law in order to exempt the requirement under section 8 for there to be a trust corporation or at least two individuals as trustees if only one trustee was originally appointed or if a contrary intention is expressed in or evidenced by the trust instrument. This new section 8(3) will only apply to a trust executed after 11 May 1998 or if section 8(3) is expressly extended to apply to the trust by a deed executed by its trustees;
  • To allow the settlor of a trust to reserve the power to appoint income and capital of the trust property in question (as opposed, arguably, to only being able to reserve the power to appoint income or capital previously);
  • To allow a single trustee to exercise the power to compound trust liabilities;
  • To remove the possible common law requirement to appoint at least something to every object of a discretionary power;
  • To extend the trustee's power to insure the trust property in the case of any adverse event and not just for fire;
  • Clearly to allow for a charitable trust to benefit the public or a section of the public outside of the Cayman Islands, wholly as well as just partly, if desired;
  • To allow for the definition of "trust corporation" to include registered controlled subsidiaries of a trust company licensed under the Banks and Trust Companies Law (2009 Revision) of the Cayman Islands;
  • To make a consequential amendment to section 110 of the Trusts Law in light of certain of the amendments described above; and
  • To insert a new Part X into the Trusts Law dealing with transitional provisions.

The Property (Miscellaneous Provisions) (Amendment) Law, 2016

This law amends the Property (Miscellaneous Provisions) Law (2011 Revision) ("PMPL") to effect the following changes:

  • To permit agents lawfully appointed in writing to execute legal assignments of things in action for their principals;
  • To require assignments of equitable interests to be made in writing or by will;
  • To provide for the construction and/or interpretation of commonly understood terms in deeds, contracts, wills orders and other instruments, such as, inter alia, "month" and "person";
  • To limit the effect of section 8(4) of the PMPL, which allows for the electronic execution of a deed or instrument under seal, to deeds or instruments under seal referred to in that section only;
  • To allow the holder of a trust power to disclaim such power by deed; and
  • To ensure that the exercise of powers by deed or other non-testamentary instrument (executed as a deed in the ordinary way) will be valid regardless as to whether the instrument creating the power being exercised requires additional or other form of execution.

These enhancements clearly indicate that the Cayman Islands remain focussed on building on what is already one of the leading international d wealth structuring jurisdictions.

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