The Trustees’ Perspective: When The Trust Doesn’t Work!

This article first published in the October issue of Tax Planning International Review published by BNA International.

The following article looks at the trustees role in administering a trust, looking at practical tax and other legal issues that can arise where trustees do not have sufficient powers or face unforeseen circumstances, with a focus on the Cayman Islands and UK case law and legislation.

I. Introduction

The Trustees of a trust owe fiduciary duties and obligations to the beneficiaries of the trust, or in the case of a STAR Trust, to ensure that they meet the objectives of the trust. During the term of the trust, it is important that the trustees have sufficient powers and that the terms of the trust sufficiently empower the trustees to meet their obligations. But what happens if the trust doesn't have such powers? What happens when the trustees face difficulties in the management or administration of the trust? For instance, what should trustees do