Bahamas: Offshore Trusts
The Bahamas is a well-established trust jurisdiction, served well by an experienced body of practitioners and a responsive Government. It allowed banks and trust companies to operate as usual during the lockdown precautions against COVID-19 and took measures so that the emergency proclamation did not automatically trigger “flee” clauses to change the governing law from that of The Bahamas. It has also laid before Parliament a bill relating to the determination of the dates when various unusual types of disposition of assets to trustees are deemed to be made, and a bill providing for the use of foundations for charitable purposes outside The Bahamas.
The Government, assisted by a committee of trust lawyers, has always been keen to be at the fore in having a trust law responsive to latest developments as shown by the following Acts: the Trustee Act 1998; the Trustee (Amendment) Act 2011; the Rule against Perpetuities (Abolition) Act 2011; the Trustee (Amendment) Act 2013; the Trustee (Amendment) Act 2016; the Trusts (Choice of Governing Law) Act 1990; the Trusts (Choice of Governing Law) (Amendment) Act 2016; the Foundations Act 2004; the Purpose Trust Act 2004; the Purpose Trust (Amendment) Act 2011; and the Executive Entities Act 2011. A very flexible array of possibly linked options involving underlying companies or other entities is thus available to serve all the needs of high net worth clients and allow them significant input into the operation of their trusts.
If unfortunate disputes arise, it is now possible to provide in trust deeds for their arbitration so as to bind minor, unborn or other unascertained beneficiaries. The first case dealing with the scope of arbitrations under the 2011 Trustee Amendment Act 2011 has now been decided by the Supreme Court in Volpi v Delanson Services Ltd, thereby clarifying the law, while indicating ways in which the law can be improved. This is currently being investigated with a view to further legislation to help establish The Bahamas as a niche arbitration jurisdiction.
The COVID-19 pandemic is having little impact upon the trust industry (as opposed to the value of trust funds) because the usual problems continue to arise in the course of administering the very large number of existing trusts, and also if tax problems arise from beneficiaries moving residence to other countries e.g. the USA. Moreover, COVID-19 intimations of mortality are leading persons to make provision for their wealth after their deaths in order to avoid the need for probate of their assets and maintain dynastic wealth for generations of their families.
Lawyers became used to working from home for three months and using audio or visual conferencing with colleagues and clients.