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Trust instrument

The Hague Trusts Convention refers to an instrument creating a trust and the writing that evidences it.

Meaning of trust instrument

The Hague Trusts Convention describes a trust instrument as the document that creates a trust or the writing that evidences it.[1]

The Convention applies only to trusts created voluntarily and evidenced in writing. It also describes trust terms as guiding the trustee's management, use or disposition of assets, alongside duties imposed by law.[1]

Where the term appears

The Convention uses the instrument or writing when describing how the settlor's choice of governing law may be expressed or inferred. If the chosen law does not provide for the trust or its category, that choice is ineffective and a different governing-law rule applies.[1]

The Jersey law distinguishes a trust instrument from the broader ways a trust may arise. A trust may arise by oral declaration, written instrument, or conduct, while a unit trust may be created only by a written instrument.[3]

The Cayman Islands statute refers to an instrument, if any, creating a trust when identifying who may appoint additional trustees. If that named person is absent or unable to act, the statute supplies another route for appointment.[4]

Bermuda's statute uses trust instrument for a document whose terms may address powers held by a settlor or another person. The listed powers include changing trust terms, directing dealings with trust property, and appointing or removing trustees or other office holders.[5]

The Bermuda provisions also connect the instrument with governing law. A settlor's choice may be express or implied in the terms of the instrument creating the trust, or in the writing that evidences it.[5]

The Convention uses trust instrument, instrument creating the trust, trust terms, and writing evidencing the trust as related expressions. They do not make the expressions interchangeable in every rule: Jersey permits some trusts to arise orally or by conduct, but limits unit trusts to written instruments.[3]

Questions and answers

Does every trust require a written instrument?

No. The Jersey law says a trust may arise by oral declaration or conduct as well as by written instrument. It requires a written instrument for a unit trust.[3]

How does the Hague Convention use the instrument?

It applies only to trusts created voluntarily and evidenced in writing. The settlor's choice of governing law may be express or implied in the instrument's terms or in writing evidencing the trust.[1]

What role can a trust instrument have in appointing trustees?

The Cayman statute refers to a person nominated in the instrument, if any, to appoint additional trustees. Where there is no such person able and willing to act, the statute identifies an alternative appointing person or group.[4]

What kinds of powers may Bermuda law associate with a trust instrument?

The statute lists powers that may arise under a trust instrument, including changing its terms and directing dealings with trust property. It also includes powers concerning trustees, beneficiaries, governing law, and administration forum.[5]

  • Settlor: A settlor is associated with creating a trust or placing property into it.
  • 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.
  • Proper law of a trust: The Jersey Trusts Law defines proper law as the jurisdiction's law expressed or implied in trust terms, or most closely connected to the trust when created.
Sources and data notes
  1. HCCH, 1985 Hague Trusts Convention. https://www.hcch.net/en/instruments/conventions/full-text/?cid=59. Retrieved .
  2. Internal Revenue Service, 26 CFR 301.7701-4. https://www.ecfr.gov/current/title-26/section-301.7701-4. Retrieved .
  3. Jersey Legal Information Board, Trusts (Jersey) Law 1984. https://jerseylaw.je/laws/current/l_11_1984. Retrieved .
  4. Cayman Islands Legislature, Trusts Act (2021 Revision). https://legislation.gov.ky/cms/images/LEGISLATION/PRINCIPAL/1967/1967-0006/1967-0006_2021%20Revision.pdf. Retrieved .
  5. Legislature of Bermuda, Trusts (Special Provisions) Act 1989. https://bermuda.fm/legislation/1591. Retrieved .

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