Knowledge

In a recent decision of 23 September 2015, in the matter of the Piedmont Trust and in the matter of the Riviera Trust [2015] JRC 196, the Royal Court in Jersey examined the extent of the duties of a person exercising a power to appoint trustees and protectors of a trust, which powers were accepted by the parties and the court to be fiduciary in nature.

The court was required to consider whether the alleged conflict of interest of the persons appointed as new protectors was such as to invalidate their appointment.

The court decided to set aside the appointments of a new trustee and protectors on the basis that the persons exercising those powers had acted irrationally and taken irrelevant factors into account.

The case demonstrated that it is important for the trustee in office to carry out due diligence on the person(s) appointed and the circumstances of the appointment. If necessary, a trustee should seek clarification from the court where there are doubts as to whether or not the protector has complied with his duties.

For further information, please contact Nancy Chien or Zillah Howard.