On May 27, 2015, the Nevis Island Assembly significantly amended its Trust laws by enacting the Nevis International Exempt Trust (Amendments) Ordinance, 2015 (the “Trust Amendments”). The Trust Amendments became effective on 1 July, 2015.
The extensive amendments strengthen the already highly regarded Nevis Trust laws and, for estate planners, attorneys and clients, the amendments provide an increased degree of clarity, certainty and peace of mind when planning and deciding on an asset protection strategy.
13. Duress; Termination by Beneficiaries
“13. To the extent any person is granted the power under the terms of a trust to demand or request any act on the part of a settlor, beneficiary, trustee, protector, or other person, or has the authority to approve, veto, or compel any action or exercise any power which affects or will affect an international trust or any interest therein, each such person is directed, to the extent such person would not be subject to personal liability or personal exposure:
(1) To accept or recognize only demands or requests, or the effects of any approval, veto, or compelled action or the exercise of any power, which are given by or are the result of persons acting of their own free will and not under compulsion or pursuant to any legal process, directive, order, or like decree of any court, administrative body, or other tribunal or like authority; and
(2) To ignore any demands or requests, or the effects of any approval, veto, or compelled action or the exercise of any power, where the person attempting to demand, request, approve, veto, compel the act, or exercise the power is not a person either appointed or so authorized pursuant to the terms of such trust.”
Essentially, the amendment provides that when demands or requests are made by persons acting under duress, via legal process, directive or order from a court, administrative body or like authority- those demands or requests may be ignored.
Section 22. General Powers of the Court
Section 22 was amended to clarify that the Court may not issue a Mareva injunction, Anton Piller order, or any similar remedy that might frustrate the purpose of a Trust, for example, by freezing the assets of the Trust.
“(4) No action or proceeding (whether substantive or interlocutory in nature) shall be heard, and no injunction, order of any kind, or any other relief or remedy, whether legal or equitable, shall be made, issued, granted or ordered, by the Court concerning an international trust where the purpose of such action or proceeding would be to detain, inspect, garnish, attach or otherwise interfere in any manner whatsoever or possible with:
(a) any trust property wherever situated whether in St. Christopher and Nevis or elsewhere, or
(b) any right, duty, discretion, obligation or power which a trustee may have in respect of any trust property.”
35A. Removal of Trustee and Protector
Section 35A was added to the Principal Ordinance immediately following Section 35. Section 35A automatically removes a trustee or protector of an international trust that is subject to any other court’s jurisdiction, except the High Court of St. Christopher and Nevis. It states:
“(1) If, in any action is brought against a trustee of an international trust in a foreign court, such foreign court fails to dismiss such action, or orders such trustee to take any action in regards to such trust, such trustee shall immediately upon such court’s action and without the further order of any court, cease in all respects to be trustee of such trust and a successor trustee shall thereupon succeed as trustee in accordance with the terms of the trust instrument or, if the trust instrument does not provide for a successor trustee and the trust would otherwise be without a trustee, the Court, upon the application of any beneficiary of such trust, shall appoint a successor trustee upon such terms and conditions as it determines to be consistent with the purposes of such trust and this statute. Upon such trustee ceasing to be trustee, such trustee shall have no power or authority other than to convey the trust property to the successor trustee named in the trust instrument or appointed by the Court in accordance with this section. The trustee shall, within fourteen (14) days of its removal, give notice in writing to the Registrar of such removal.
(2) If, in any action is brought against a protector of an international trust in a foreign court, such foreign court fails to dismiss such action, or orders such protector to take any action in regards to such trust, such protector shall immediately upon such court’s action and without the further order of any court, cease in all respects to be a protector of such trust. Upon such protector ceasing to be a protector, such protector shall have no power or authority in regards to the trust. The protector shall, immediately following its removal hereunder, give notice in writing to the trustee of the international trust of such removal.”
The strong anti-duress and anti-injunction provisions noted above tighten up the Nevis International Trust laws. Together with the removal of Trustee and Protector provisions in Section 35A, Nevis’ reputation as a premier jurisdiction to establish an asset protection trust has been significantly enhanced.
Practitioners should avail themselves of this and other new amendments, which you can find in the legislation section of our website: https://www.southpactrust.com/southpac-publications/legal-references/. Feel free to contact me or another client service manager to discuss these new provisions.
Charles Petero CPetero@southpactrust.com
Attorney at Law, Client Services Manager