Trust and Probate Litigation partner Marcus Parker spoke to the Cayman Islands-based IMG Trust Company to share lessons from recent cases including a recent landmark case in which Stewarts acted.

Marcus’ article addresses how evolving trust law impacts trustees’ liability and dispute resolution, as well as the importance of a trust’s proper purpose and the complexities of restructuring trusts amidst familial disagreements. The full article is available to read now on IMG’s website, with the introduction and a synopsis included below.

Introduction

The problem with trusts is that there are so many things that can go wrong. Trustees can find themselves either being directly attacked or in the middle of what becomes a protracted and expensive dispute.

To add to this, trust law constantly evolves and the last couple of years has seen some really important decisions across the offshore world which potentially impact on the exposure of trustees to liability and their ability to tackle disputes.

Recent cases where we have been involved have highlighted:

• The need for trustees to be aware of a trust’s “proper purpose” when exercising decisions
• How trusts should be restructured (particularly when there is disagreement about how that should be done) and the involvement of the Court in that process
• That capacity (or rather the lack of) is increasingly a key element of a trust dispute

Synopsis of trends

Trustees making decisions must do so for a “proper purpose”. The long running case of Grand View Private Trust Company v Wong is important not only because Stewarts acted for the winning party (by 5-0) in the Privy Council but because this case should now be considered every time a trustee makes a decision.

Another significant area of work for our team are contentious global trust restructures. They usually occur after the death of the patriarch or matriarch or when they are moving into their last stage of life and the wider family are no longer happy for their interests to all be within the same structure.  They also often arise where the trust asset is a family business.

Mental capacity issues are increasingly common in trust disputes.  Challenges on grounds of capacity were historically the purview of probate disputes – nephews getting an aunt with advanced dementia to sign a will and so on. But we are now seeing lifetime capacity challenges arise independently, and also in a number of our trust cases when the exercise of powers are challenged on the basis of the incapacity of the power holder.

More information

With more than 25 years’ experience as both an English lawyer and a Cayman-based professional trustee, Marcus has extensive experience in disputes involving wealthy global families and their associated structures.

IMG Trust Company provides a full range of professional fiduciary services to ultra-high net worth individuals, families and global businesses from around the world. Read the full article by Marcus on IMG’s website.