Migrating the Domestic Asset Protection Trust OffshoreMigrating 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 full article can be found here: Migrating the Domestic Trust Offshore. 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

 

A copy of the full article can be found here: Migrating the Domestic Trust Offshore.

David M. Grant