Cayman Abolishes Rule Against Perpetuities

Key Takeways

• Welcome statutory reform to Cayman's perpetuity law
• Cayman trusts can now exist indefinitely

New (amending) legislation has been passed in the Cayman Islands which disapplies the rule against perpetuities for Cayman Islands law ordinary trusts, with the effect that such trusts can now last indefinitely. Cayman Islands STAR trusts were already not subject to the rule.

Previously, ordinary trusts established under Cayman Islands law were subject to the rule against perpetuities. This means such trusts were required to vest within a perpetuity period of 150 years, at which point the trust property was required to be distributed in accordance with the terms of the trust.