Frequently Asked Questions: Trust Law

Trusts are a key tool in estate planning, asset protection, and wealth management—especially in Jersey, a jurisdiction known for its well-established trust law. Whether for personal, charitable, or business purposes, understanding how trusts work is essential.

This FAQ guide answers common questions about Jersey trusts, including how they are created, the types available, and their legal and practical benefits.

What is a trust?

A trust exists in Jersey where a person (known as a trustee) holds or has vested in them or is deemed to hold or have vested in them property which they are holding –

(a)     for the benefit of any person (known as a beneficiary) whether or not yet ascertained or in existence; or

(b)     for any purpose which is not for the benefit only of the trustee; or

(c)     a combination of (a) and (b).

 

Why should I set up a Jersey trust?

Trusts in Jersey are generally established as for estate planning purposes.  Discretionary trusts or Will Trusts are typically used to protect family wealth and managing business assets.  Charitable Trusts are typically established for philanthropic purposes.

 

What are the different types of Jersey trusts?

Listed below are some of the common express trusts that exist in Jersey.  These are all typically created by an instrument executed in writing

• A discretionary trust – in this type of trust, the trustee has full discretion over how to distribute the trust’s income and capital among the beneficiaries or purposes.  The beneficiaries do not have a fixed entitlement to the income and capital of the trust, instead the trustee decides who receives what funds, how much, and when.

• A will trust – this type of trust is created through a person’s will and as such only comes into effect upon their death.  This can have elements of a discretionary trust.

• A non-charitable purpose trust – this is a type of trust that is set up to achieve a specific purpose rather than to benefit identifiable individuals or charitable causes.  An example of a non-charitable purpose could includemaintaining and preserving a historical artefact, or holding shares in a company.

• A charitable purpose trust – this is a type of trust established to further charitable purposes rather than for specific beneficiaries.  For a Jersey charitable purpose trust to be valid, its charitable purposes must be recognised as charitable purposes under the Charities (Jersey) Law 2014.

 

There are also some Trusts that come into existence by operation of law. This means that they come into existence automatically due to the application of certain legal principles.  The main types of trusts that fall within this category include:

• Resulting Trust – this typically occurs when a trust fails, typically due to it not complying with all of the formalities to create a trust.  The person who has this property holds it on resulting trust for the person who provided the trust property to them

• Constructive Trust – this is typically imposed by the courts to prevent unjust enrichment or fraud.  It often arises in cases of breach of fiduciary duty.

 

How do I set up a trust?

To set up an express trust, typically one executes a trust instrument that establishes the terms of the trust.  In order for a trust to formally come into existence, the settlor must have a clear intention to divest themselves of the initial trust property and to transfer it to one or more of the trustees appointed in the trust instrument.

 

How do you decide who your trustee should be (who should my trustee be) and can I be the trustee?

A trustee can be anyone whether that be an individual or a company.  An individual must be over 18 and have mental capacity.  Becoming a trustee brings with it very important duties and obligations.  As such, it is common nowadays for a professionally regulated provider of trustee services to act as a trustee.

 

What assets can be placed in a trust?

In Jersey, generally any asset can be placed into a trust except immovable (real) property situate in Jersey.  However, if the immovable property is owned by a company, the shares in that company can be placed into a trust.

 

Will a trust help me avoid probate?

Once an asset is placed into a trust it no longer belongs to the person who transferred it.  In theory if a person transferred every asset they owned into a trust, there may not be the requirement to obtain a Grant of Probate/Letters of Administration should that person die as they would ultimately not have any assets.  However, the reality is that this situation is highly unlikely.

 

If a sole trustee (who was an individual) died, the trust property devolves to their personal representative (i.e. the executor of their personal estate) who would then be charged with discharging the obligation of trustee or alternatively could appoint a person to assume the trusteeship in their place.  This would require a Grant of Probate/Letters of Administration.

 

What are the benefits of having a trust?

Traditionally trusts were established to protect an individual’s or family’s personal wealth and to allow planning for the future, often called estate and succession planning. A trust can be a useful route to preserve ownership of family assets and for legitimate tax planning.

Can a trust be changed or revoked?

This ultimately depends on the terms of the trust. 

Generally, if a trust instrument does not contain a power to amend, its terms cannot be amended by the trustees alone.  Similarly, if a trust instrument does not contain a power of revocation, or is expressed as being irrevocable, the trust cannot generally be revoked.

However, there are certain legal mechanisms that may allow modifications/revocations in specific circumstances:

• If all of the beneficiaries of the trust are of full age (i.e. over the age of 18) and all have capacity, they may all unanimously agree to terminate or modify the terms of a trust.

• The Trusts (Jersey) Law 1984 grants the Royal Court the power to approve variations to trust instruments in certain circumstances. The Royal Court also has the power to set aside the establishment of a trust if it was found to have been established by fraud, duress or mistake.

How does a trust differ from a will?

A will only comes into effect upon the death of the testator.  An express trust (save for a Will Trust) comes into effect the moment that the trustee has the initial trust property placed into their hands.

 

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