VISTA Trust Summary

BACKGROUND: THE PROBLEM WHICH THE VIRGIN ISLANDS SPECIAL TRUSTS ACT ADDRESSES

The "prudent man of business" rule

The trust has always been regarded as one of the best "succession vehicles," but its use to cater for the succession of shares in companies has historically been impeded by a rule of English trust law (the "prudent man of business rule") which is designed to help preserve the value of trust investments. This rule has traditionally made the trust an unattractive vehicle to hold assets which settlors intend trustees to retain. Another aspect of the rule effectively requires trustees to monitor and intervene in the affairs of underlying companies (as the English decisions Re: Lucking's Will Trusts and Bartlett v Barclays Bank Trust Co Ltd made clear); this also creates difficulties both from the settlor's standpoint and from that of the trustees.