What is a Trust?
A trust is defined by the Trusts Act (the “Act”) as a legal arrangement whereby property is transferred by a Settlor to a Trustee for the benefit of one or more persons including himself and known as the beneficiaries or for a stated charitable or non-charitable purpose (for e.g. commercial) provided that the non-charitable purpose is specific, reasonable and capable of fulfillment and is not immoral, unlawful or contrary to public policy. A trust may also be created which is of a type recognised by a settler’s religion, nationality or community.
Formalities and Registration
No strict formalities are required to create a trust. A trust can be created by an oral declaration or an instrument in writing or by conduct or even by operation of law. There is also no mandatory registration requirement. A trust may nevertheless be registered if the settlor or trustee determines, but even if registered, it is not open for public inspection.
Management of Trust
Once the trust is created, all decisions in relation to property or assets of the Trust are made by the Trustee. The Trustee’s powers are usually prescribed by the Trust instrument. Additionally, Anguilla law allows the Settlor to provide the Trustee with a Letter or Memorandum of Wishes with regard to the exercise of any or all his function as Trustee and once given, the Trustee may have regard to it. Non charitable purpose trusts are also required to have a Protector whose duty is to enforce the Trust.
Who can be Trustees
The Trust Companies and Offshore Banking Act provides that any person carrying on the business of acting as trustee must have a license. A foreign company (provided it is re-registered in Anguilla) may be licenced as a trustee. The minimum capital requirement is US$250,000.00 or equivalent in another currency or such greater sum as may be ordered depending on the nature of business. All Licensees must have a principal place of business in Anguilla and the authorized agents must also be resident in Anguilla.
Solvency of the Trustee
The trust fund is a ring-fenced fund protected against the insolvency of the Trustee and further protected by the beneficiaries’ rights in the traced product of the trust assets. Additionally, the provision for the appointment of a Protector, who usually has the power to add or remove a trustee, means that there is someone overseeing the activities of the Trustee.