Amendments to Guernsey Trust Law
4 Min Read
A modern refresh for a world leading trust jurisdiction.
Guernsey is preparing to give its trust law a significant update. A package of proposed amendments to the Trusts (Guernsey) Law 2007 was approved in principle by the States of Guernsey on 20 May 2026. Draft legislation will now be prepared and, if approved, will implement the changes.
The aim is clear: to keep Guernsey aligned with international best practice, respond to issues highlighted in recent case law and reinforce the island’s position as a leading jurisdiction for high‑value trust and fiduciary services.
Reserved powers: a new fiduciary starting point
Modern trusts often give settlors or third parties (such as protectors) “reserved powers” over key decisions. At present, Guernsey law generally assumes those power holders are not acting in a fiduciary capacity unless the trust document says otherwise.
The proposed amendment reverses that presumption: reserved powers will be treated as fiduciary by default, unless the trust instrument expressly provides to the contrary, which should mean greater certainty for trustees, protectors and advisers.
Streamlining trustee administration
Two practical changes are proposed. First, the minimum number of trustees will be reduced so that a trust may have a single trustee unless the terms of the trust require more. Secondly, individual trustees who become mentally incapable will be removed automatically, reducing the need for court applications.
Paying professional trustees—by default
Under the current regime, trustees are typically only paid if the trust instrument authorises it. The reforms will introduce a default right for professional regulated trustees to receive reasonable remuneration, subject to the trust terms or beneficiary agreement. This should provide comfort and clarity for professional trustees.
Liability, liens and limitation periods: more certainty
A trustees’ entitlement to reasonable security for liabilities before transferring trust property will be clarified. Statutory liens will be amended so they do not override earlier security arrangements or lender security.
Time limits for the commencement of claims against trustees will be modernised, running from the earlier of (i) delivery of complete and accurate trust accounts, or (ii) the beneficiary’s knowledge of a breach of trust.
Trust‑to‑trust transactions: solving the “two‑party” problem
Guernsey trustees often administer multiple connected trusts. The reforms will allow a trustee to contract with itself when acting as trustee of another trust, subject to safeguards—addressing the long‑standing legal hurdle that a party cannot contract with itself, even in different capacities.
Powers of attorney: removing the three‑year cap
The current three‑year limit on duration of powers of attorney will be removed, improving flexibility for investment and transactional activity while retaining protections against wholesale delegation.
Terminating trusts: restoring the traditional position
It is proposed that beneficiaries will only be able to compel termination of a trust where the class of beneficiaries is closed. If trustees (or another party) have a power to add beneficiaries, the existing beneficiaries would not be able to force termination.
Wider Royal Court powers to approve variations
The Royal Court’s ability to approve variations and transactions will be expanded, including where unanimous beneficiary consent cannot realistically be obtained or where a single beneficiary blocks a sensible arrangement—while retaining safeguards to protect core legal principles.
A more flexible available remedy
A breach of fiduciary duty will not be required for the Court to set aside a flawed fiduciary decision, and the Court will be able to declare decisions void, voidable, or effective on modified terms.
Privacy, ADR and arbitration: modern dispute resolution tools
Finally, the reforms will introduce express provision for private hearings and anonymisation, remove the requirement for ADR (Alternative Dispute Resolution) settlements to be signed by all parties, and expand the use of arbitration, including recognition of arbitration clauses in trust instruments, subject to court oversight.
In short: if enacted, these reforms will modernise Guernsey’s trust framework, address practical issues that have emerged since the legislation was last revised, and help to strengthen the island’s appeal for both trust administration and dispute resolution.
This article first appeared in En Voyage magazine and is authored by Partner, Head of Disputes & Risk, Todd McGuffin and Partner, Martin Jones.