BVI Introduces New Reserved Power Trust Legislation

Background - why reserved power legislation has been enacted

For many settlors, particularly those from non-trust jurisdictions or from family backgrounds in which well-administered trusts do not feature¹, the establishment of an inter vivos trust can involve an appreciable leap of faith, especially since, once the trust has been validly established, the settlor has no right to interfere in its administration except to the extent that the relevant rights are expressly reserved to him or her by the trust instrument. 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 on their trustees.²