Guernsey Trust Types and Features
Guernsey has a statutory trust definition and selected trust types and features. The statute also covers how trusts may be created and when a written instrument is required.
Statutory framework
The Trusts (Guernsey) Law, 2007 defines a trust by reference to property held by a trustee outside the trustee's own estate, for another person's benefit or for a purpose not solely benefiting the trustee.[1]
The statutory definition includes beneficiaries who are not yet ascertained or in existence, and allows property to be held for beneficiaries, purposes, or both.[1]
Discretionary trusts
A Guernsey discretionary trust gives the trustee discretion over how, when and how much of the trust fund is applied for beneficiaries.[2]
Beneficiaries have no entitlement to distributions from the trust fund; distributions depend on the trustee exercising its discretion.[2]
Purpose trusts
Guernsey trusts may be established for charitable purposes, noncharitable purposes, or a combination of both.[2]
A purpose trust has purposes towards which assets are applied, rather than beneficiaries. A trust for noncharitable purposes requires an enforcer with a fiduciary duty to enforce those purposes.[2]
Reserved powers and duration
A settlor may reserve powers to themselves or grant powers to others, including powers to revoke or amend trust terms and to advance, appoint, pay or apply trust income or capital.[2]
A Guernsey trust may be established for an unlimited duration.[2]
Creation and written instruments
Section 6 permits creation of a trust orally, by a written instrument, by conduct or in another manner.[1]
The same section requires a written instrument for a unit trust and for a trust of real property situated in Guernsey.[1]
Related reading
Guernsey offers several trust forms, each with its own creation rules. Guernsey Trust Legislation covers the statute and selected rules in more depth. Guernsey trusts and U.S. reporting rules and Guernsey reporting and U.S. foreign trust forms cover tax and reporting topics. Guernsey trusts and U.S. reporting requirements is the jurisdiction start page.
Questions and answers
Does a non-charitable purpose trust require an enforcer?
Yes. An enforcer must be appointed and has a fiduciary duty to enforce the trust's purposes.[2]
Related resources
Related glossary terms
- 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.
- Recognition of a trust: The Hague Convention describes recognition of a trust, its minimum legal effects, and limits tied to applicable law. Jersey law also addresses recognition.
Related articles and guides
- 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.
- Reserved Powers in Trust Instruments: Trust instruments may reserve powers to a settlor or grant them to others, while listed statutes address their validity and whether a holder becomes a trustee.
- 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
Sources and data notes
- trusts.it, The Trusts (Guernsey) Law, 2007. https://trusts.it/admincp/UploadedPDF/200803181151540.sGuernseyTrustLaw2007.pdf. Retrieved .
- mourant.com, Guernsey: Trusts, Mourant. https://www.mourant.com/guides/guernsey-trusts/. Retrieved .
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