Trusts (Special Provisions) Amendment Act 1998

Link to law: http://www.bermudalaws.bm/Laws/Annual%20Laws/1998/Acts/Trusts%20%28Special%20Provisions%29%20Amendment%20Act%201998.pdf

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Trusts (Special Provisions) Amendment Act 1998
TRUSTS (SPECIAL PROVISIONS) AMENDMENT ACT 1998

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BERMUDA
1998 : 24

TRUSTS (SPECIAL PROVISIONS) AMENDMENT ACT 1998

[Date of Assent 24 June 1998]

[Operative Date 1 September 1998]

WHEREAS it is expedient to amend the provisions of the Trusts
(Special Provisions) Act 1989 relating to purpose trusts and, in
consequence, to amend the Perpetuities and Accumulations Act 1989:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

Short title and commencement
1 This Act may be cited as the Trusts (Special Provisions)
Amendment Act 1998, and shall come into force on such date as the
Minister of Finance may appoint by notice published in the Gazette.

Purpose trusts
2 For Part II of the Trusts (Special Provisions) Act 1989 (trusts for
a purpose) there shall be substituted—

TRUSTS (SPECIAL PROVISIONS) AMENDMENT ACT 1998

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"PART II
PURPOSE TRUSTS

Purpose trusts
12A (1) A trust may be created for a non-charitable
purpose or purposes provided that the conditions set out in
subsection (2) are satisfied; and in this Part such a trust is
referred to as a "purpose trust".

(2) The conditions are that the purpose or purposes
are

(a) sufficiently certain to allow the trust to be
carried out,

(b) lawful, and

(c) not contrary to public policy.

(3) A purpose trust may only be created in writing.

(4) The rule of law (known as the rule against excessive
duration or the rule against perpetual trusts) which limits the
time during which the capital of a trust may remain
unexpendable to the perpetuity period under the rule against
perpetuities shall not apply to a purpose trust.

(5) The rule against perpetuities (also known as the
rule against remoteness of vesting) as modified by the
Perpetuities and Accumulations Act 1989 shall apply to a
purpose trust.

Enforcement and variation of purpose trust by the court
12B (1) The Supreme Court may make such order as it
considers expedient for the enforcement of a purpose trust on
the application of any of the following persons

(a) any person appointed by or under the trust for
the purposes of this subsection;

(b) the settlor, unless the trust instrument provides
otherwise;

(c) a trustee of the trust;

(d) any other person whom the court considers has
sufficient interest in the enforcement of the
trust;

TRUSTS (SPECIAL PROVISIONS) AMENDMENT ACT 1998

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and where the Attorney-General satisfies the court that there is
no such person who is able and willing to make an application
under this subsection, the Attorney-General may make an
application for enforcement of the trust.

(2) On an application in relation to a purpose trust by
any of the following persons

(a) any person appointed by or under the trust for
the purposes of this subsection;

(b) the settlor, unless the trust instrument provides
otherwise;

(c) a trustee of the trust,

the court may if it thinks fit approve a scheme to vary any of the
purposes of the trust, or to enlarge or otherwise vary any of the
powers of the trustees of the trust.

(3) Where any costs are incurred in connection with
any application under this section, the Supreme Court may
make such order as it considers just as to payment of those
costs (including payment out of the property of the trust).

Effect of non-compliance
12C Nothing in this Part affects the creation, termination or
validity of any trust created under any other law, but, save as
aforesaid, purpose trusts which do not comply with section 12A
are invalid.

Land in Bermuda
12D No interest in land in Bermuda shall be held, directly or
indirectly, in a purpose trust."

Consequential amendment
3 In section 17 of the Perpetuities and Accumulations Act 1989
(application), at the beginning of subsection (1) there shall be inserted
"Subject to section 12A of the Trusts (Special Provisions) Act 1989,".

Application
4 (1) The substitution for Part II of the Trusts (Special Provisions)
Act 1989 as originally enacted of Part II as set out in section 2 above
("the new Part II") shall apply—

(a) in relation to trusts created after the coming into force of
this Act; and

TRUSTS (SPECIAL PROVISIONS) AMENDMENT ACT 1998

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(b) as provided in subsection (2), in relation to trusts for
non-charitable purposes validly subsisting immediately
before that date ("existing purpose trusts").

(2) On the coming into force of this Act—

(a) existing purpose trusts shall be deemed to satisfy the
conditions set out in section 12A(2) of the new Part II;

(b) an appointment under section 13(1)(e) of the 1989 Act
(enforcer) shall be deemed to have been made for the
purposes of section 12B(1) of the new Part II; and

(c) subject to paragraph (b) above, the trust instrument
shall be deemed to have provided that the settlor shall
not make an application under section 12B(1) or (2) of
the new Part II by virtue of paragraph (b) of those
subsections.