Bermuda bids to lure rich families after scrapping trust law
The Bermudan government has changed its laws in a bid to make itself more attractive to multi-generational wealthy families seeking to establish trusts in offshore trust jurisdictions, following the example of other offshore jurisdictions Jersey and Guernsey.
The Bermuda Parliament passed the Perpetuities and Accumulations Act 2009, which abolishes the rule against perpetuities for Bermuda law trusts, which requires interests in property to vest within a certain period and which effectively imposes a maximum life span on trusts.
John Goodchild, a partner at lawyer Permberton Greenish, said: "My view is that this is a step taken by Bermuda in order to remain competitive with those other jurisdictions in appealing to potential international clients who wish to tie up assets indefinitely within family trusts (as opposed to charitable trusts)."
Bermuda law trusts established after 1 August 2009 will no longer be required to limit their duration to 100 years, whether they are trusts for beneficiaries or for charitable or non-charitable purposes. Trusts already in existence on that date will be able to apply to the Bermuda court for an extension of their trust period.
Offshore law firm Conyers Dill and Pearman believes the flexibility which comes with the removal of the perpetuity period for all trusts enhances the attractiveness of Bermuda as a trust jurisdiction for wealthy families.
Increasingly, clients are looking to trusts as part of their long term wealth preservation strategy rather than for any short term advantage, said the lawyer.
The new rules will not apply to Bermuda real estate.
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