Like many offshore jurisdictions, the Cayman Islands has bespoke
reserved powers trust legislation, providing clarity and certainty
for settlors and trustees of Cayman Islands' trusts.
In this briefing, we will summarise what you need to know about
the reserved powers legislation.
Background
Under common law, there was a degree of uncertainty about the
extent to which assets settled into a trust could continue to be
controlled by a settlor while also satisfying the requirement that
there was an intention to create a valid trust. A trust that fails
to meet this requirement is at risk of being declared a
"sham" trust.
The reserved powers legislation clarifies the position by
confirming that the reservation or grant of certain powers by the
settlor of a trust will not invalidate the trust or affect the
presumption of its creation taking immediate effect.
