Topic Archives: Wills, Trusts & Estates

Meritus Trust Company Limited v Butterfield Trust (Bermuda) Limited [2017] Bda LR 82

In October 2017, Chief Justice Kawaley ruled that an outgoing trustee is neither entitled to retain any part of the trust assets as security for its equitable indemnity as former trustee nor demand a contractual indemnity.

This case involved an outgoing institutional trustee who upon being removed (as opposed to having retired) as trustee of two trusts, refused to hand over sizeable trust assets or trust documents to the new trustee without first obtaining a contractual indemnity and retention of assets from the two trusts. This was against the backdrop of a potential breach of trust claim of an approximate value of $5 million. The trust deeds did not confer any express retention or contractual indemnity rights on the former trustee.
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For the third year running, MJM Director Fozeia Rana-Fahy has been listed as one of the Top 200 international Powerwomen by Citywealth. The list honours 200 of the most powerful women in government, private wealth, education, private client advisory and philanthropy across the international financial centres (IFCs). The IFC Powerwomen Top 200 list focuses on influencers as well as professionals and celebrates powerful women from diverse backgrounds. It recognises women of achievement who are trailblazers in their field, helping to promote business excellence in their home jurisdiction and consolidating the reputations of the financial services industry globally.
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Recently tabled in the House of Assembly, the Proceeds of Crime Amendment (No.3) Act 2017 (“PCA3”) will have the effect of extending regulatory reach to lay trustees.

Some of you already act as a trustee for a friend or family member. Others will be asked to do so in future. The playing field is changing for lay trustees and it is important to fully understand the responsibilities of the position.
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Church Bay Trust Co. Ltd. v Her Majesty’s Attorney General for Bermuda [2017] SC (Bda) 34 Civ (1 May 2017)
In this case, the Plaintiff Trustee sought rectification of a Settlement on the grounds of mistake as the terms of the Trust Deed conferred a power upon the Trustee to add and exclude beneficiaries only during the lifetime of the Settlor. The Court held that the quality of the evidence supporting the mistake was very high because it was derived from prior to the execution of the Deed and was based on communications between the Trustee and Settlor. It was clear that the Settlor did not intend the Trust property to go to charity (the ultimate beneficiary) when there were alternative persons identified by him to be added as beneficiaries. Therefore, in an effort to give effect to the true intentions of the Settlor, the application was granted to rectify the Trust Deed in the terms prayed.

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The Chief Justice has recently considered the impact of the Children Act 1998 (“the Act”) as amended by the Children Amendment Act 2002 (“the 2002 Amendments”) upon the ability of trustees to change the governing law of a foreign law trust to Bermuda.

The 2002 Amendments, which came into force in January 2004, created a new rule for construing all instruments, including international trusts. On one reading of the Act, a person can no longer validly give a gift or make dispositions of property to their “legitimate children” only (unless each legitimate child is identified by name), since such a gift/disposition would be construed as a gift/disposition to their legitimate and illegitimate children.
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