Purpose Trusts: An Overview

Under most jurisdictions, unless a trust is established for charitable purposes, the assets require to be held for a specific beneficiary or class of beneficiaries. However, it is possible in the BVI to establish a trust for non-charitable purposes. Such trusts are commonly referred to as 'purpose trusts'.

Conditions

In order for a non-charitable purpose trust to be valid, the following conditions must be satisfied:

• the purpose(s) must be specific, reasonable and possible
• the purpose(s) cannot be immoral, unlawful or contrary to public policy
• at least one trustee must be a 'Designated Person'
• the trust instrument must appoint an 'Enforcer' who cannot also be a trustee