Cayman Islands STAR trusts—common uses
Produced in partnership with Mourant Ozannes
Cayman Islands STAR trusts—common uses

The following Private Client guidance note Produced in partnership with Mourant Ozannes provides comprehensive and up to date legal information covering:

  • Cayman Islands STAR trusts—common uses
  • Part VIII of the Trusts Law (2011 Revision)
  • STAR trusts generally
  • Perpetual nature
  • Commercial arrangements
  • Troublesome beneficiaries
  • Philanthropic purposes
  • Shares in private companies
  • Unique assets (non-diversification)
  • Investment/unit trusts

Part VIII of the Trusts Law (2011 Revision)

Non-charitable purpose trusts are called ‘STAR’ trusts in the Cayman Islands. They are subject to specific statutory provisions at Part VIII of the Trusts Law (2011 Revision) as revised from time to time (Trusts Law) which sets out the 'Special Trusts—Alternative Regime', hence the acronym 'STAR' trusts.

STAR trusts generally

The STAR trust is arguably the most flexible and dynamic form of trust available in the Cayman Islands. It is capable of carrying out any number of charitable and non-charitable purposes so long as such purposes are lawful and not contrary to public policy.

[Trusts Law, s 99(3)]

STAR trusts are capable of being pure purpose trusts or trusts for individuals only, or a combination of the two. STAR trusts are also capable of being perpetual in nature which distinguishes them from other forms of private Cayman Islands trusts (non-charitable in nature) which are otherwise currently subject to a maximum 150 year perpetuity period (see section 13 of the Perpetuities Law (1999 Revision)).

The STAR trust also shifts the rights of enforcement and rights to trust information away from the beneficial objects and vests these powers in an enforcer. Another key feature is that a STAR trust cannot be collapsed by all of the beneficiaries acting together utilising the principle of law set