Super-Powered Settlors

The reservation or grant of certain powers by settlors has always been possible under Bermuda's trust law but, historically, there was some uncertainty about exactly how far settlors could go without calling the validity of the trust structure into question. The recently passed Trusts (Special Provisions) Amendment Act 2014 (TAA 2014) now provides statutory clarity and certainty in this area.

The TAA 2014 expressly lists certain interests and powers that can be retained by a settlor or granted to a third party (e.g. a protector or beneficiary) without thereby prejudicing the validity of a trust. It also clarifies that the retention or grant of these powers,¹ and interests,² will not cause the property in the trust to become part of the settlor's estate. Introducing certainty in this area distinguishes Bermuda from some of the other major o. shore jurisdictions.