English Traditions

Bermuda is a jurisdiction in the English tradition. The applicable law is drawn from common law the doctrines of equity and all English Acts of general application which were in force on 11th July 1612. These are subject to Acts passed in Bermuda since that date repealing, modifying or amending those laws or doctrines.

Under the Constitution appointments to the judiciary are the direct Responsibility of the Governor. The Judicial Department is headed by the Chief Justice, and is administered by the Registrar of the Supreme Court.

The judges of the Supreme Court of Bermuda are at present a Chief justice and four Puisne judges, The Court enjoys unlimited jurisdiction in .11 divisions of the law. It sits in its Criminal, Divorce, Civil, Appellate and Admiralty jurisdictions as directed by the Chief justice.

The Court of Appeal for Bermuda consists of a President and two Justices of Appeal. The Court as first constituted in 1964 and sat for the first time in September 1965. The Appeal Court normally sits three times a year to hear appeals from decisions of the Supreme Court and in its civil and criminal jurisdictions. Final appeal lies to the Privy Council in London.

Bermuda's recognition of equitable principles (established over centuries by English and Commonwealth courts) provides the basis for the enforcement of trusts. The Trustee Act 1975 incorporates most of the provisions of the (U.K.) Trustee Act 1925. The Trusts (Special Provisions) Act 1989 (Appendix VII (a)), The Perpetuities ad Accumulations Act 1989 (almost identical to the U.K. Act of 1964 of the same title) (Appendix VII (b))) the enactment in 1994 of Part IV A of the Conveyancing Act 1981 (Appendix VII (c)) dealing with the validity of transfers of assets into trust funds significantly enhance the security of Bermuda as an offshore trust location. Major "legal" features include the following:

Trust Law - Bermuda Features

i) Bermuda law recognises the choice of governing law expressed in a trust and the ability to change the governing law to or from that of Bermuda;

ii) Questions of capacity and the validity of the trust are to be determined by the law of Bermuda ,here that is the governing law;

iii) No Bermuda trust may be set aside by reason only that the laws of a foreign jurisdiction do not recognise the concept of a trust where the trust defeats rights conferred by a foreign law such as Forced Heirship provisions;

iv) Bermuda law allows full delegation of powers of investment and management of the trust fund;

v)Bermuda has developed the concept of the Private Trustee Company to administer family or group assets;

vi) In addition to charitable trusts (see infra at 6.5), Bermuda will recognise a "purpose trust" where the purpose is specific, reasonable, possible, and not immoral or unlawful;

vii) It is possible to specify a maximum perpetuity period of up to 100 years, or a life in being plus 21 years;

viii) Accumulation of income is permitted throughout the trust period, subject to the power of the Trustee to terminate at any earlier date (if so desired).

ix) The trust may be revocable or irrevocable;

x) Unlike many other (often less stable) jurisdiction Bermuda does ..not require details of trusts to be disclosed to or registered with any public authority. Where the trust is to hold shares in a Bermuda-incorporated exempted company, however, some particulars of the settlor and/or beneficiaries will be required by the Bermuda Monetary Authority, in strict confidence. It is of course possible for a Bermuda trust to own the shares of an International Business Company in another jurisdiction without the need for such disclosures;

xi) Stringent privacy laws prevail.

xii) No taxes, stamp duties or other imposts are payable to the Government of Bermuda, and there are no filing requirements for trusts.

xiii) In order to enhance the long-term security of assets transferred into a Bermuda Trust the Conveyancing Amendmemt Act 1994 clarified and restricted the circumstances in which transfers of assets might be impeached under "fraudulent conveyance" rules.

xiv) Detailed Schedule of Trustees Powers may (pursuant to the Trusts (Special Provisions)Act 1989) be incorporated in a Trust Deed by reference, (see Appendix VII (a)) avoiding drafting "clutter".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.