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

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

  • Cayman Islands STAR trusts—common uses
  • Part VIII of the Trusts Law (2020 Revision)
  • STAR trusts generally
  • Perpetual nature
  • Commercial arrangements
  • Troublesome beneficiaries
  • Philanthropic purposes
  • Shares in private companies
  • Unique assets (non-diversification)
  • Investment/unit trusts

This Practice Note provides guidance on Cayman Islands STAR trusts. For general information about the Cayman Islands, see Practice Note: Private Client jurisdictional guide—Cayman Islands.

Part VIII of the Trusts Law (2020 Revision)

Non-charitable purpose trusts are called ‘STAR’ trusts in the Cayman Islands. The legislation which allowed for STAR Trusts to be established in the Cayman Islands is the Special Trusts (Alternative Regime) Law 1997, hence the acronym ‘STAR’. This legislation has been incorporated into the Trusts Law (2020) Revision (Trusts Law) at Part VIII.

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 (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

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