Charitable & Non-Charitable Purpose Trusts

A Charitable and Non-Charitable Purpose Trust (STAR Trust) is a trust written under Part VIII, Special Trusts Alternative Regime, of the Trust Law (2007 Revision) of the Cayman Islands. Some of the features which distinguish a STAR Trust from ordinary trusts are, but are not limited to, the following:

• It is a private purpose trust. However it can also be used for charitable purposes.
• It does not require beneficiaries in order to exist. Beneficiaries can be appointed in the future.
• If there are beneficiaries, they do not have any standing, as is the case in ordinary trusts.
• Provided that the purpose is achievable, a STAR trust does not have a perpetuity period.
• A STAR Trust requires an Enforcer, which can be a person, a group of individuals or a corporate entity.

Benefits:

• Investment flexibility:
  • If the purpose so allows, a STAR Trust can hold and invest in assets which may not be suitable for ordinary trusts, such as having the Trust Fund comprised of one line of stock

• Continuity:
  • A STAR Trust is particularly useful for the retention of family business for the benefit of the next generation

• Enhanced protection and confidentiality:
  • The only person or entity (other than the trustee), which has access to information on a STAR Trust, is the Enforcer

• Privacy:
  • As beneficiaries in a STAR Trust have no entitlement to information about the trust, this eliminates the possibility of a hostile beneficiary attacking the trust

• Commercial transaction:
  • As a STAR Trust does not require beneficiaries, it can be use to achieve a pure commercial transaction such as taking over a particular company, thereby protecting the names of individuals who can be appointed beneficiaries on a later date

• Private Trust Companies
  • A STAR trust is an ideal structure to own Private Trust Companies