As a jurisdiction, Nevis is highly regarded as setting the standard among offshore trust laws, blazing new trails in this is area since 1994 with other jurisdictions attempting to play catch-up. Over time, other jurisdictions have enacted similar trust laws, however, Nevis continued to remain at the forefront of innovation and practicality. However, the legal and business world does not remain static and the laws needed to be modernized in order to remain relevant.
On May 27, 2015, the Nevis Island Assembly enacted the Nevis International Exempt Trust (Amendments) Ordinance, 2015 (the Trust Amendments). The Trust Amendments became effective July 1, 2015. The Nevis International Exempt Trust (Amendment) Ordinance, 2015 (the Ordinance), modernizes the Nevis International Exempt Trust Ordinance, 1994 (the Original Ordinance) and makes it more competitive in the trust services market.
The Trust Amendments include the following provisions:
- Updating important terms used throughout the Ordinance since its inception in 1994 and adding a number of new definitions;
- Clarifying the validity of a trust registered under the Ordinance that was formed or established in a location other than the settlor’s domicile or residence;
- Eliminating the Rule Against Perpetuities and the Rule Against Accumulations, making it is possible to establish a dynasty trust in Nevis that can last forever;
- Limiting the rights of a creditor to reach a beneficiary’s interest in a trust, helping to ensure that a beneficiary's interest and the assets held in the trust will not be subject to interference by any potential creditor during the course of the administration of the trust;
- Permitting a settlor to establish a directed trust, which ensures a more fluid and expedient administration of a trust, a reduction of administration fees over the term of the trust, and enables the trust to hold assets and be administered in a manner that a trustee would have previously determined to be far too risky to approve;
- Increasing the asset protection aspects of a trust and ensuring the administration of a trust will not be interrupted by litigation by eliminating the possibility of a local court issuing a Mareva injunction;
- Clarifying the indemnification provisions applicable to the trustee, ensuring a more fluid and expedient administration of a trust, the reduction of administration fees over the term of the trust, and enabling the trust to hold assets and be administered in a manner that a trustee would have previously determined to be far too risky to approve;
- Clarifying certain aspects of the fraudulent transfer rule;
- Expanding the list of beneficiaries of an international trust and thereby better coordinating the operation and administration of the residency by investment program in St. Kitts & Nevis with the Ordinance;
- Facilitating the administration of a trust;
- Expanding protections available to a trustee with regards to accounting to beneficiaries, thus enabling an individual to establish a trust, the provisions of which can be kept confidential from its beneficiaries for as long as the individual may deem appropriate;
- Expanding the list of powers that a settlor can retain without a trust being declared invalid;
- Increasing the bond requirement for creditors who want to challenge an international trust in Nevis, making it far less attractive for an heir, beneficiary, or creditor of a settlor to contest or attack the trust and its provisions;
- Allowing the Minister charged with the responsibility of finance in Nevis to establish an advisory body for matters affecting the Ordinance, ensuring that Nevis will annually consider updating and modernizing its trust law and remain a leader as a jurisdiction to establish a trust; and
- Permitting a statutory tenancy by the entireties trust (STET), becoming the first offshore jurisdiction to permit married individuals to transfer their entireties property to a trust and presumptively retain the creditor protection characteristics of such property while gaining the stronger creditor protection aspects of the trust.