Its fiduciary and private client expertise runs deep, with Jersey boasting one of the largest (if not the most) qualified memberships of the Society of Trust and Estate Practitioners (STEP), amongst many other professional qualifications. The sector is also supported by a strong presence of reputable private client law firms and tax practitioners.
Underpinning its success is Jersey’s political stability and that of the jurisprudence of the Royal Court, which has been in place since the 13th Century. Together these factors make Jersey a popular destination for wealth structuring and trusts sit at the heart of many of these plans.

USES OF JERSEY TRUSTS

Trusts are a flexible method to address wealth planning needs. For individuals, this could include estate planning, asset protection, protection of vulnerable beneficiaries, management and devolution of family wealth and the promotion of charitable and philanthropic causes.

Some of the more common types of Jersey trusts are:

  • discretionary trusts: a trust in which the settlor has given the trustee full discretion to decide which (and when) members of a defined group of beneficiaries are to receive either the income or the capital of the trust; or
  • charitable trusts: a trust created for charitable purposes only, e.g. for the advancement of education.

Other types of Jersey trusts include Shariah-compliant trusts, reserved powers trusts, purpose trusts, private family trusts, accumulation and maintenance trusts and interest in possession trusts (where a life tenant receives income and after their death, the remainderman receives the capital element of the trust fund).

Trusts can also be used as part of commercial planning needs, such as employee benefit structures, pension funds, securitisation and off-balance sheet financing arrangements, acquisition of commercial property using unit trusts and organisation of private equity, hedge and real estate investment arrangements.

SETTING UP A JERSEY TRUST

Before setting up a trust, it is important that both legal and tax advice is obtained to ensure that settling a trust and the type of trust to be used, is the optimum wealth planning solution for the settlor’s needs. It is also important to choose a suitable trustee from one of the many reputable trust companies based in Jersey.

Working with the selected trust company, after due diligence has been completed including source of wealth and source of funds, a trust deed will then be prepared. The trust is established when the settlor transfers assets to the trustee, which will be held on the terms of the trust for the benefit of the beneficiaries.

In addition to the trust deed, the settlor may also write a letter of wishes to the trustees, which is a private document and not legally binding on the trustees. It sets out the settlor’s wishes for the trust and gives guidance in relation to, for example, school and university fees, supporting beneficiaries with new business endeavours, purchasing first homes and ESG considerations.

MAINTAINING STANDARDS IN JERSEY’S TRUST SECTOR

As we celebrate 2021 for marking 60 years since Jersey’s modern financial services industry put down roots, as fiduciary practitioners, we also look to the future to ensure that we remain one of the leading international finance centres. This requires close collaboration with our regulator, the Jersey Financial Services Commission (JFSC), Jersey Finance, the Jersey branch of STEP, as well as more recently, Digital Jersey.

Every trust company in Jersey is licensed by the JFSC, where it must adhere to legislation and regulation covering corporate governance in respect of compliance, risk, span of control, capital maintenance and outsourcing, amongst others. Thematic reviews are also undertaken regularly by the JFSC to ensure the highest standards are maintained.

Indeed, the majority of trust companies in Jersey – numbering over 50 – are members of the Jersey Association of Trust Companies (JATCo), which is a proactive organisation representing its members’ interest to government and financial service regulators. It is estimated that 4,000 people are employed locally by our members, which contribute a significant percentage to the Island’s annual tax revenues. JATCo’s activities include:

  • Cross-body collaboration: JATCo works with other trade bodies in Jersey on issues affecting both the fiduciary sector and the wider business environment.
  • Sector updates: We collate opinion and inform members about developments within the industry, be they technical, regulatory, fiscal or of a practical nature.
  • Monthly committee meetings: Members from the Government of Jersey (GoJ), JFSC and Jersey Finance are invited to attend our monthly committee meetings to ensure effective communication between all parties as to current matters. The President of JATCo also sits on various advisory groups, which work with the aforementioned bodies on Island initiatives.
  • Annual seminars: Our annual seminar provides a platform for relevant keynote speakers to relay critical information to decision makers and opinion formers (both locally and further afield) upon which to make decisions affecting the Island’s trust industry.

THE JERSEY FIDUCIARY LANDSCAPE CONTINUES TO INNOVATE

Much has been said regarding the expected ‘Great Wealth Transfer’ of the next 30 years, as the ‘baby boomer’ generation pass on their wealth to their children and grandchildren. In this
decade alone, US$8.8 trillion is expected to be transferred in America, US$3.2 trillion in Europe and US$1.9 trillion in Asia.**

This phenomenon will create new opportunities and challenges for the private wealth industry. Many families are also increasingly seeking a globalised solution to their own unique needs. With the right professional help and advice, high net worth families and individuals can protect and plan for the transfer of their wealth through effective wealth structuring.
In many cases, the transfer of wealth may include the use of trusts, foundations, companies and limited partnerships established in Jersey.

However, the transfer of wealth from one generation to the next is just one of a number of scenarios currently changing the face of the fiduciary landscape. Other significant trends influencing the private client value chain include:

  • Digitalisation: The COVID-19 pandemic has catalysed the fiduciary sector’s adoption of digital processes. Homebound workforces have embraced electronic signatures and
    minute books, digital company incorporations and virtual meetings, which continue to be critical for maintaining client relationships.Digital change will not only continue but will accelerate and consequently it is great to have an establishment such as Digital Jersey to tap into as we see further interest and expansion into digital currencies, exchanges and banks.
  • ESG: We are also witnessing a generational shift in wealth appropriation and the values driving these decisions. Environmental, social and governance (ESG) considerations
    have in many cases become fundamental to investment decisions. Investment managers are responding to this demand, adapting their investment reports and portfolios and encouraging employees to take relevant qualifications. As a fiduciary with responsibility to enhance the trust fund, demand for ESG and government initiatives targeting carbon neutrality add a new dimension to the industry.
  • Philanthropy: Interestingly, in Ocorian’s 2021 global survey of private client practitioners, 76% said the COVID-19 pandemic had led to an increase in their clients’ concerns over investing in philanthropic projects. The pandemic has made all individuals, no matter the value of their own personal wealth, consider their own mortality and has led a majority to review their wealth and estate plans. This is where Jersey stands out for its stability, well-established legislature, quality of service and product offering.

For some, these concepts can be entirely new and this is where Jersey Finance has been instrumental in helping provide intermediaries, individuals and families with a better understanding of our fiduciary industry. Their work is especially relevant in the globalised age, where we can provide services to clients around the world in addition to our traditional markets of the United Kingdom and Europe.

A BRIGHT FUTURE AHEAD

With a deep-rooted commitment to service excellence and a dynamic, forward thinking fiduciary and regulatory ecosystem, Jersey will remain a leading international financial centre and a global hub for private clients.

* Jersey Financial Services Commission (Statistic correct as at December 2019)
** A Generational Shift: Family Wealth Transfer Report 2019, Wealth X

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Jersey First for Finance 13th Edition
In this special edition of Jersey ~ First for Finance, we highlight our contributors’ personal reflections on our industry’s sixty years and the challenges and opportunities we face in the future.
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