A discretionary trust is therefore established reserving investment powers to the settlor during his or her lifetime but providing that, on the death of the settlor, either a person nominated by the settlor or the trustees may assume responsibility for the investment of the trust fund and protect it well into the future for the next generation. Often, the individual may be content to handle his or her own investments during their lifetime but may be concerned about the ability of heirs to do so after their death. On this front, it is very common to see a family scenario involving a matriarch or patriarch who has built up a sizeable private company wishing to protect those business interests for future generations. Advisors in the jurisdiction continue to establish, on a regular basis, traditional discretionary family trusts designed primarily to assist ultra-high net worth individuals to structure their family wealth across generations and protect it well into the future.The following are just a few examples of the types of trusts being established in the Cayman Islands: Interestingly, tax mitigation is no longer the sole (or in many cases, the primary) reason for the establishment of Cayman Islands trusts and the reality is that the circumstances and needs of modern clients vary significantly. With trust business booming, it is interesting to take a closer look at exactly what types of trusts are being formed in the jurisdiction, and who is forming them. Official statistics published by the Cayman Islands General Registry in January 2021 showed that the number of new trusts registered in the jurisdiction grew in 2020.
TURMOIL ACROSS THE STARS PROFESSIONAL
In addition, the report notes that the number of ultra-high net worth individuals, usually defined as those having investable assets of more than US$30m, grew by 24 per cent worldwide in 2020, the fastest rate of increase since 2003.Įxperience dictates that the generation of immense personal wealth results in increased demand for professional services such as fiduciary appointments and the private client industry in the Cayman Islands has seen this demand jump significantly. According to the Global Wealth Report published by Credit Suisse in June 2021, more than five million people became millionaires across the world in 2020 despite economic damage from the pandemic.
In fact, the impact of the pandemic on private clients has been the opposite many have experienced increases in their personal wealth that have been nothing short of startling. However, bucking this trend, the growth of private client work offshore appears in some respects (and at least to date) to have continued on unaffected in any profoundly negative sense by this recent turmoil.