07 February

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