Dennings Trustees Limited is licensed to provide trustee services in SVG. We are also capable of acting as co-trustee to any trust, if its applicable law so permits. Trust laws vary widely amongst offshore jurisdictions. For example, some jurisdictions require that trust documents be filed at a central registry, while others do not, yet others make it optional.
The International Trusts Act 1996 (“ITA”) is the definitive law governing the creation and administration of international trusts in SVG. Several types of trusts are possible under the ITA. We can assist our clients in establishing reserved powers trusts, purpose trusts (both charitable and non-charitable), discretionary trusts and protective/ spendthrift trusts.
Reserved powers trusts (also called “settlor- controlled” trusts) are particularly useful to those clients who wish to retain substantial control over the management of the trust assets. Our clients generally find that by establishing an IBC or LLC and placing their holdings in the company in reserved powers trusts (while maintaining control of the underlying company) is a very effective way of managing their affairs.
Reserved powers trusts are specifically provided for under SVG law, and an international trust will not be declared invalid or affected in any way if the settlor:
A discretionary trust with a protector approved by the settlor client is best suited to those clients who wish to fully dispose of their assets without recourse.
Some key provisions of the ITA are as follows:
Trust of shares and interests in underlying offshore companies
Section 36 of the International Business Companies (Amendment and Consolidation) Act 2007 (“IBCA”) provides that where voting shares of an SVG international business company are settled into a unit trust the proper law of which is the law of SVG or into a trust established under the ITA, the trustees of such trust shall have an overriding duty to hold the shares but no duty to enquire into or take any active part in the management of the company unless otherwise provided in the trust deed or the company’s constitution.
Creation of a Trust
All international trusts must be created by an instrument in writing that satisfies the formal requirements of a deed or settlement under the proper law of the trust. There is no provision in the ITA for creation by a declaration of trust, and all trust deeds must be evidenced by writing signed by both the settlor and the trustees. Under section 4(2), a trust is regarded as having been created at the time when the property is first received by or vested in the trustee to be held by him in accordance with the terms of the trust.
At least one of the trustees (“the registered trustee”) of an SVG trust must be licensed in SVG.
Registration of trusts is not mandatory. However it is prudent to register since the ITA gives trusts which are registered special protection from attack, provided that the settlor was not insolvent at the time the trust was created nor became insolvent by reason of its creation, and the trust was not created with intent to defeat his creditors. Registration also creates a rebuttable presumption that the trust, its income, and its beneficiaries are entitled to exemption from all SVG taxes and duties.
The registered trustee of an international trust created under the ITA must keep as confidential information in SVG, the following:
(i) the name of the settlor,
(ii) if a purpose or charitable trust, a summary of the purposes of the trust and the name of the protector of the trust, and
(iii) such documents as are necessary to show the true financial position of the trust, which must be current as of one month following the close of each fiscal quarter.
The instrument, register and documents referred to above are not be available to the public, but the registered trustee must allow the protector (or a person authorized in writing by the protector) to inspect the instrument, register and the documents described in the register, but no others.
Confidentiality and Disclosure
Except in the case of a trust advisor appointed under the trust deed (or by the trustees or the protector) no person (including the trustee and protector) may disclose to any other person not legally entitled to it, any of the following information or documents respecting an international trust:
(i) the name of the settlor or any beneficiary;
(ii) the trustees’ deliberations as to the manner in which a power or discretion was exercised or a duty conferred by the terms of the trust or by law was performed;
(iii) the reason for the exercise of the power or discretion or the performance of the duty or any evidence upon which such reason might have been based;
(iv) any information relating to or forming part of the accounts of an international trust; or
(v) any other matter or thing respecting an international trust.
The registered trustee must, at the written request of a beneficiary named in the trust, disclose any document or information relating to or forming part of the trust accounts. This entitlement does not however extend to letters of wishes or like expressions of the settlor’s intent.
Rights of Creditors
Any claimant wishing to challenge or proceed against an international trust or sue the trustees for breach of trust must do so within 2 years from the date of creation of the trust or from the date the cause of action arose. Before commencing his claim, the claimant must pay a cash sum of US$25,000 into court as security for costs.
Provided that the settlor was not insolvent at the time the trust was created, did not become insolvent by virtue of its creation, and did not establish the trust with intent to defraud creditors the trust will not be declared void or voidable in the event of the settlor’s bankruptcy or insolvency.
In addition to acting as trustees, we are prepared to act as protector in relation to any foreign trust established by our clients.