07 February
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Migrating the Domestic Asset Protection Trust Offshore
On October 2, 2009 Attorney David M. Grant presented an article, “Migrating the Domestic Asset Protection Trust Offshore,” at the Annual Southpac Offshore Planning Institute in Las Vegas, Nevada. The article discusses techniques for trust migration or trust redomiciliation. It also provides reasons for using a domestic asset protection trust prior to going offshore. Moreover, the article provides the following chart explaining the specific rules relating to trust migration for particular offshore jurisdictions:
Jurisdiction | Governing Law | Inbound Migration | Outbound Migration |
Anguilla | Anguilla Trusts Ordinance | Allowed if recognized by previous governing law | Allowed if recognized by the new governing law and where the new law recognizes the validity of the respective interests of the beneficiaries |
Bahamas | Trusts (Choice of Governing Law) Act | Allowed without limitation | Allowed without limitation |
Belize | Trust Act | Allowed without limitation | Allowed without limitation |
Bermuda | Companies Act | Allowed without limitation | Allowed without limitation |
British Virgin Islands | Trustee Amendment Act | Allowed, however, use of “flee” clause not allowed where: 1) court order disallows; 2) criminal proceedings instituted; 3) investigation begun by BVI Financial Service Commission | Allowed if recognized by the new governing law |
Cayman Islands | Cayman Trusts (Foreign Element) Law | Allowed if recognized by previous governing law | Allowed if recognized by the new governing law |
Cook Islands | Cook Islands International Trusts Act | Allowed without limitation | Allowed without limitation |
Cyprus | International Trusts Law | Allowed if permissible under previous governing law | Allowed if permissible under new governing law |
Gibraltar | Trustee Ordinance; and Trusts Ordinance | Allowed | Allowed |
Guernsey | Guernsey Trusts Law | Allowed | Allowed |
Isle of Man | Trustee Act; Variation of Trusts Act; Recognition of Trusts Act; Trusts Act; and Trustee Act | Thought to be allowed as long as trust instrument provides, due to absence of laws either authorizing or restricting | Thought to be allowed as long as trust instrument provides, due to absence of laws either authorizing or restricting |
Jersey | Trusts (Jersey) Law | Allowed if valid under previous governing law | Allowed without limitation |
Labuan | Labuan Offshore Trusts Act | Allowed, however, possibly subject to appropriate legal capacity under governing law in previous jurisdiction | Allowed |
Liechtenstein | Liechtenstein Civil Code, note: Liechtenstein is among the only civil law jurisdictions to have adopted a common-law-type trust | Allowed without limitation | Allowed without limitation |
Malta | Trusts Act | Allowed where formalities required for the settlement of a Maltese trust are met | Allowed without limitation |
Nevis | Nevis International Exempt Trust Ordinance | Allowed, provided no part of the previous law will operate to render the trust or its functions void, invalid or unlawful under Nevis law | Allowed, provided new jurisdiction is protected from provisions of Nevis law which would otherwise operate to render the trust or its functions void, invalid or unlawful |
Niue | Niue Trusts Act | Allowed where no provision of the prior law can operate so as to invalidate the trust under Niue law | Allowed where no provision of the Niue law can operate so as to invalidate the trust under the new law |
St. Lucia | St. Lucia International Trusts Act | Allowed without limitation, regardless of whether recognized by laws of prior jurisdiction | Allowed without limitation |
Turks and Caicos | TCI Trusts Ordinance | Allowed, provided trust was property constituted under laws of original jurisdiction. | Allowed without limitation |