A purpose trust is a trust created in order to fulfil a purpose rather than for the benefit of a person. Guernsey law permits purpose trusts to be established in order to fulfil non-charitable purposes rather than to benefit a person.

These trusts must be created by an instrument in writing and the terms must include the appointment of an enforcer.The enforcer has a fiduciary duty to enforce the trust and may be an individual, group of individuals or a corporate provided it is a different person from the trustee.

Heritage can assist with the creation and on-going administration of Guernsey purpose trusts which may be used in the following situations:

  • Family businesses – used by entrepreneurs to ensure the continuity of their business through generations, for example holding voting shares in a company so that the descendants do not have the ability to sell or wind up the business
  • Quasi-charitable purposes – where there is doubt as to the validity of the charitable purpose falling within the strict four recognised heads of charity
  • Special Purpose Vehicles ("SPVs") – in securitisations, to hold the shares in an ‘orphan’ SPV
  • Private trust companies – to incorporate and hold shares in a private trust company, acting as trustee for a trust or group of trusts

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