BVI Introduces New Reserved Power Trust Legislation

Background—why reserved power legislation has been enacted

Many prospective settlors, especially those from jurisdictions or family backgrounds in which trusts do not feature,¹ the establishment of a lifetime trust can involve a rather significant leap in the dark. This is so, because, once such a trust has been established, the settlor would have no control over its administration – that is, unless the trust instrument expressly reserves rights to him or her. These concerns of settlors about relinquishing ownership and control will indeed be particularly prevalent in the case of a trust which is established as a discretionary trust and where especially wide powers are conferred on their trustees.²