Nevis Trust Rules Changes

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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.