Cayman Islands STAR trusts—drafting
Produced in partnership with Robert Mack of Mourant Ozannes (Cayman Islands Office)
Cayman Islands STAR trusts—drafting

The following Private Client guidance note Produced in partnership with Robert Mack of Mourant Ozannes (Cayman Islands Office) provides comprehensive and up to date legal information covering:

  • Cayman Islands STAR trusts—drafting
  • Drafting STAR Trusts
  • Declaration of application of STAR law
  • Trusts for purposes, persons, or both
  • Duration
  • The enforcer
  • Trust Corporation
  • Land in the Cayman Islands

In the Cayman Islands, non-charitable purpose trusts are called STAR trusts and are subject to specific statutory provisions set out 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', also known as STAR trusts.

Drafting STAR Trusts

In addition to the general duty the draftsperson owes to the settlor to produce a trust instrument which accurately and correctly reflects the settlor's instructions, there are certain drafting matters which are unique to STAR trusts and are set out below.

Declaration of application of STAR law

Trusts Law, s 96(1) requires an explicit declaration in the trust instrument to enable it to come within the ambit of the STAR regime. Failure to do so is fatal and will likely result in the trust being construed as an ordinary (non-STAR) trust even where the instrument contains provisions which would have otherwise been valid and effective under the STAR regime. A typical such declaration will look like this:

‘It is intended that this Trust and every trust, power, and provision contained in this instrument shall be subject to Part VIII of the Trusts Law (2011 Revision) as revised from time to time’.

Trusts for purposes, persons, or both

It is possible for the objects of a STAR trust