Cayman Islands trusts—types of trusts and practical application
Produced in partnership with Mourant Ozannes and Carey Olsen
Cayman Islands trusts—types of trusts and practical application

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 trusts—types of trusts and practical application
  • Most common types of trusts
  • Discretionary trusts
  • STAR trusts
  • Life interest trusts
  • Fixed interest trusts
  • Other types of trusts
  • Accumulation and maintenance trusts
  • Charitable trusts
  • Revocable trusts
  • More...

Cayman Islands trusts—types of trusts and practical application

Most common types of trusts

Discretionary trusts

A discretionary trust generally provides maximum flexibility. It is the most widely used and often the most effective solution for both the settlor and beneficiaries. The trustee is given wide discretionary powers as to when, to what extent and to which beneficiaries, the income and capital of the trust should be distributed. Such a trust is useful where at the time of creation of the trust, the future needs of beneficiaries cannot be accurately determined and are likely to change over time. The beneficiaries are not regarded as having any direct legal rights over any particular portion of the trust fund but only a right to be considered when the trustee exercises its discretion.

While the beneficiaries of a discretionary trust are not regarded as having any direct legal rights over any particular portion of the trust fund but only a right to be considered when the trustee exercises its discretion, the Cayman Court in Lemos v Coutts [2003] CILR 381 (not reported by LexisNexis®) held that discretionary beneficiaries had the right to apply to the court and ask it to supervise the administration of the trust and the right did not require the beneficiaries to demonstrate a proprietary interest in the property.

STAR trusts

The Cayman Islands provides for a unique form of non-charitable

Popular documents