Seymour Trust Ltd

Comparison of Jersey Foundations and Jersey Trusts

Jersey Foundations Jersey Trusts
1 Jersey Foundations have their own legal personality and are the owner of assets; they can contract in their own name and can sue and be sued. Jersey Trusts do not have a legal personality of their own, but the Trustees of Jersey Trusts are the legal owners of the assets, and the Trustees contract and are responsible for the liabilities of the Trust.  This frequently creates significant onerous responsibilities and the Trustees will often require additional protection to safeguard themselves against potential claims against them from third parties, particularly at times that they are parting with the assets of the Trust (e.g. by way of distribution or on retirement and appointment of new trustees).
2 Jersey Foundations are incorporated and must register in the Public Registry of the Jersey Financial Services Commission, although minimal information is available for Public inspection (this is confined to the name of the Foundation and a copy of the Charter, which can be limited to containing the names and addresses of the first members of the council of the Foundation and a general statement that, on winding up, the assets will be disposed of in the manner set out in the Regulations of the Foundation). There is no registration of Jersey Trusts.
3 Jersey Foundations need not have any initial endowment donated by the Founder. Jersey Trusts must have an initial endowment (otherwise known as ‘initial settled funds).
4

Beneficiaries of Jersey Foundations have no interest in the assets of the Foundation and are not owed a fiduciary duty by the Foundation or by persons appointed under the Regulations of a Foundation (although if a benefit is not provided to a Beneficiary who has become entitled to benefit either under the terms of the Foundation’s Charter or the Regulations, he can apply to the Jersey Royal Court for an Order to provide such benefit).

Additionally, unless otherwise specified in Charter or Regulations of the Foundation or as separately required by Law, Jersey Foundations are not required to provide any person (including beneficiaries) with any information concerning the Foundation.

Trustees of Jersey Trusts owe a fiduciary duty to the Beneficiaries (potentially including Beneficiaries who have yet to be borne).

Additionally, adult Beneficiaries (with full legal competence) have a right on demand to receive information concerning the Trust, including a copy of the Trust Instrument and the financial details of the Trust.

This can create particular difficulties if the person settling the Trust wishes details of the trust to remain confidential from the Beneficiaries (e.g. when the trust is created for spendthrift purposes or when the settlor of the Trust does not wish to confer a benefit until the Beneficiaries reach an age subsequent to the age of majority).
5 The Members of the Council of Jersey Foundations must act honestly and in good faith with a view to the best interests of the Foundation and must exercise the care, diligence and skill that reasonably prudent persons would exercise in similar circumstances.

As well as acting with due diligence, as would a prudent person and to the best of their ability and skill, Trustees are also required to, as far as is reasonable, preserve and enhance the value of trust property.

This can create particular difficulties where it is desired that the Trust holds wasting assets.
6 The Jersey Financial Services Commission can refuse the incorporation of a Jersey Foundation if the foundation would be contrary to Jersey’s public interests. The Jersey Financial Services Commission has no direct control over the activities of Jersey Trusts.