Chapter 13 - Types of Trusts

Revocable v Irrevocable Trusts

• Whether a trust can be revered or is irreversible
• The only way an irrevocable trust can be revoked is via court order (forms a constructive trust) if it is in the best interest of beneficiaries to do so

Discretionary Trust

• The most common type of trust in offshore centres
• grants the trustees discretion to exercise their powers as they see fit

Settlors can be comforted when setting up a discretionary trust by:

• appointing a protector
• letter of wishes although not legally binding

Settlor Reserved power trust

These trusts allow the settlor to retain some control over the trust without it becoming a sham trust

Types of powers a settlor may reserve:

• The power to appoint/remove trustees, enforcers, protectors, beneficiaries, directors, investment manager
• Power to change proper law of trust

Life Interest Trusts/Interest in Possession Trust

• Allows a beneficiary to have life enjoyment of the trust property. The beneficiary is also referred to as the 'life tenant'
• After…