Please note that there is currently a working party considering legislation concerning trusts in Guernsey.  The working party issued an interim report for consultation purposes.  A copy of this report can be downloaded from the States of Guernsey website: http://www.gov.gg/ccm/navigation/commerce---employment/trust-law-working-party-interim-report-/

The information set out below relates to the current position in Guernsey and should not be taken to indicate any future intentions of the States of Guernsey.

TRUSTS

College Chambers Trustees Limited is a company controlled by the partners of F Haskins & Co. This company acts as trustee for a number of trusts. F Haskins & Co can provide advice on matters concerning the creation and management of trusts in Guernsey. Through College Chambers Trustees Limited the practice can also provide trust administration services.

A trust exists where a person (or a company) holds assets for the benefit of another and/or for certain purposes. There are many forms of trust and many reasons for the use of the same. Set out below are details of the more common forms of trust and the uses of the same.

Settlement

A settlement is created where one person gives property (usually in the form of money) to another to hold for the benefit of yet another. The person giving the property is called the settlor. The settlor enters into an agreement with the individual or company who is to hold the property known as the trustee. The trustee holds the property for the benefit of a third individual (or a group of individuals) known as the beneficiary.

Declaration of Trust

Whereas a deed of settlement establishes the trust as a form of agreement between the settlor and the trustee, a declaration of trust does not involve a settlor. In this instance the settlor and the trustee might be considered as one and the same. Thus the settlor makes a declaration that he holds certain property for the benefit of a beneficiary.

Discretionary Trust

Where property has been transferred to a trustee, the trustee is obliged to hold and deal with the same in accordance with the terms of the trust deed or declaration. This may provide for the trust property to be dealt with in a specific manner or provide the trustee with a wide discretion. The discretion may relate to the management or administration of the trust property or the manner in which the trust property is to be applied for the trust’s specified purpose or the benefit of the beneficiary or beneficiaries. For example a trust may provide for monies to be invested with the income being paid to a beneficiary for a period of time. The more common form of trust provides the trustee with discretion as to the application of trust property and is therefore known as a discretionary trust.

Charitable Trusts

A charitable trust is simply a trust in which the trustee holds the property for charitable purposes. It is common for trust deeds to specify a charity as a default beneficiary (so that if all the intended beneficiaries have died then the trust property might be used for charitable purposes).

Reasons for Establishment

There can be no exhaustive list of the reasons for the creation of a trust or the advantages of the same. Common reasons include asset protection, estate (succession) planning, financial planning or simply a desire to prevent the dissipation of assets by those who would otherwise have control of the same.

Information

For further information on the creation and management of trusts please contact F Haskins & Co on the telephone number, at the address or by e-mail at the address indicated on this page.

Revised 5 July 2006.