Last week, the Cayman Islands Parliament passed the Perpetuities (Amendment) Bill, 2024, abolishing the rule against perpetuities in relation to Cayman ordinary trusts. The rule had previously imposed a requirement for a Cayman ordinary trust to vest within a 150-year perpetuity period, with the trust otherwise becoming void after this period. (The rule did not apply to Cayman Islands STAR trusts.)
These amendments to the legislation will enhance Cayman’s competitive position within the estate and succession planning arena and will help to maintain the jurisdiction’s position within the global fiduciary services sector. Cayman authorities recognised that other jurisdictions had implemented similar changes with no negative impact on their international ratings from an anti-money-laundering perspective, and this move will align Cayman with other competitor financial centres.
The new regime will apply to new Cayman ordinary trusts. Existing trusts that are subject to the rule against perpetuities can apply to the Grand Court to extend its vesting period or to disapply the rule.
Naro Zimmerman, Deputy Head of Caribbean Private Client Services said:
The recent changes to the perpetuity period mark a significant positive shift for the Cayman Islands as a leading global financial jurisdiction. By modernising and extending this timeframe, the Cayman Islands demonstrate a commitment to aligning with international best practices, enhancing the flexibility and attractiveness of our legal framework for trusts. These reforms fortify our position as a premier destination for trust and estate planning, ensuring long-term stability and confidence for investors and beneficiaries alike.
