Guernsey trust law amendments: evolution, not revolution

Guernsey’s current globally recognised and well-regarded trusts legislation has, for almost two decades, kept the jurisdiction at the forefront of the international trusts industry. To uphold its reputation as a leading international finance centre, amendments have been proposed to the Trusts (Guernsey) Law, 2007 (the Law) to ensure it remains clear and robust. 

The Law came into force in 2008 and was, and remains, a notably well considered and modern Law, thanks to its measured and thoughtful drafting. Taking into account industry feedback from practitioners as well as developments in other jurisdictions, the amendments proposed by the Committee of Economic Development (the Committee) in a policy letter in March 2026 (the Policy Letter) address areas of potential uncertainty, cost or practical difficulty. They aim to preserve the existing statutory framework while improving certainty without losing flexibility. 

The States of Deliberation, Guernsey's legislature, debated and approved the proposed amendments to the Law at its meeting on 20 May 2026. The legislation has not yet been drafted and so the exact wording of the amendments is awaited. 

This article summarises the key changes that could affect you as a trustee, beneficiary, protector or other fiduciary officeholder. 

A few fundamentals 

Amendments to a number of fundamental provisions in the Law are aimed at making trust administration more practical. 

Trust duration 

Under the current Law, trusts can be created for an unlimited duration, and trusts created before the Law could only be established for up to 100 years. But there is uncertainty around whether this would apply to a trust previously governed by another law which permitted an unlimited duration but has since become Guernsey law governed. As such, it is proposed it be made clear that the limitation of 100 years only applies to Guernsey trusts established between 1989 and the Law coming into force. This also takes into account the duration of Guernsey law trusts created prior to 1989 pursuant to Guernsey case law (Mercator Trustees Limited and Chrisalis Trustees (Guernsey) Limited Re the XYZ Settlement). 

Number of trustees 

It is proposed that the Law allows for a trust to have one trustee, regardless of whether it was established with more than one. This will assist when only one trustee is preferred or only one can be in place for a certain period of time due to surrounding circumstances, such as where one of two trustees has died.  

Incapable trustees 

Currently, an individual trustee's appointment ends on death, but the position is not clear where someone becomes incapable. The amendments clarify that a trusteeship automatically ends on incapacity or death, and what is to happen to the assets they hold. This will help avoid the time and cost of dealing with such issues at difficult and emotional times. 

Remuneration 

The Law currently states that a trustee may not be remunerated for their role unless the trust terms provide so. This can cause issues when, for example, professional trustees are subsequently added after lay trustees were originally in office and the terms did not anticipate future professional trustees being appointed. The amendments will reverse the position for professional trustees only, and they will be entitled to reasonable remuneration, subject to the trust terms, agreement with beneficiaries or an order of the Royal Court. 

Liability and liens 

Currently, a trustee of a Guernsey law trust can be personally liable for debts or breaches incurred as trustee, unless they have legal or contractual protection. 

The proposed amendments address several areas relating to trustee liability. 

• The Policy Letter proposes clarifying trustees’ entitlement to reasonable security for liabilities before surrendering trust property, including on revocation or termination of a trust.
  
  
• The Policy Letter proposes amendments to section 44 on a trustee’s lien. It identifies a possible issue where a statutory lien may take priority over older security arrangements that pre-date the Law and therefore could not have expressly waived the statutory lien. It will also ensure that a trustee’s lien does not take priority over express security granted to banks or other third-party lenders, so that lenders can have confidence that security over trust assets is effective. 
  
  
• Claims for breach of trust are prescribed after three years from the date of breach under the Law, running, in respect of (a) a plaintiff and (b) a plaintiff who was, at the time of the breach, a minor or a person under a legal disability and it is proposed that amendments be made to provide that they run from the earlier of (a) the date of delivery of the accounts of the trust (provided those accounts are complete and accurate) to the beneficiaries or (b) the date on which the claimant first has knowledge of the breach, and recommends that the Law be amended according to provide for both option (not just (b)). 

A robust approach to reserved powers 

Guernsey trusts are commonly used when the settlor wants either themselves or someone else to be involved in the administration of the trust to the extent appropriate to do so. Persons can be given reserved powers under section 15 of the Law accordingly (and are often referred to as “protectors”).  

While section 15 is considered flexible and a positive aspect of Guernsey trusts law, the proposals consider the underlying nature of these powers.   

At present, section 15(2)(b) of the Law says that, subject to the terms of the trust, the powerholder or protector does not by default have a fiduciary role. 

It’s proposed that this is reversed for trusts created after the amendment comes into force, so reserved powers become fiduciary powers unless the trust terms explicitly say otherwise. 

Combined with the outcome of A & Others v C & Others [2026] UKPC 11, reserved power holders will need to exercise their fiduciary powers widely, unless provided otherwise in the trust terms. As such, they are not just there to say yes or no to the trustee, but to consider afresh if the power itself should be exercised at all and in that way. 

Confidentiality and disclosure  

The proposed amendments will extend section 38’s non-disclosure protections beyond trustees in certain circumstances. Section 38 allows trustees to deliberate fully and frankly without fear that their reasons, deliberations or letters of wishes considered will be disclosed, and the amendments would now also protect other trust officials with fiduciary duties.  

Transactional considerations 

Are there two-parties? 

Individuals or corporate trustees often act as trustee of more than one related trust. In these circumstances, the trustee may transfer or lend assets as trustee of one trust to the other, or enter into a transaction (such as selling an asset) between the two.   

However, a transaction of this nature can breach a number of fundamental trust rules which apply in Guernsey: 

• the two-party rule 
• the rule against self-dealing 
• the no-conflict rule 
• the genuine transaction rule 

The amendments propose allowing a person acting as trustee of one trust to contract or transact with itself as trustee of another trust, with safeguards in place, without infringing the two-party rule. 

Jersey already allows this exception to the two-party rule, and these amendments provide a sensible solution to issues we see arise time and time again, ensuring Guernsey remains a practical jurisdiction for trust administration.  

Powers of attorney 

Trustees commonly grant powers of attorney, for example as part of investments being made, but the Law currently limits the duration of a power of attorney to no more than three years. The amendments propose removing the three-year limit, while preserving existing safeguards for wholesale delegation but introducing greater flexibility where a single function is delegated for a single transaction. 

Clarifying termination rights after Rusnano 

A welcome amendment concerns section 53(3), which was intended to codify the rule in Saunders v Vautier. Following the recent Guernsey court decision in Rusnano Capital AG v Molard International (PTC) Limited, it was held that section 53(3) should be terminated and distributed at the request of the sole existing beneficiary of a trust, even where the trustee has a power to add further beneficiaries. This contrasts with the position under Saunders v Vautier and was contrary to what many practitioners considered.   

In light of this, it has been proposed that section 53(3) be amended so that it aligns more closely with the common law position. It should apply only when no more beneficiaries can be added, and they can demonstrate an absolute, vested and indefeasible interest in the trust property. 

The rule in Saunders v Vautier has itself evolved under English law and, on the understanding that the Guernsey statutory position reflects the common law position, many welcome additional clarity confirming our expectation that the provision does not apply to hybrid trusts, unit trusts or pension trusts.  

Expanded court powers for variations and transactions 

The Policy Letter proposes a potentially important expansion of the Royal Court’s ability to approve variations of trusts. 

At present, variation of beneficial interests can only be achieved with the consent of all beneficiaries, with the Court giving consent on behalf of certain categories of persons under section 57. The proposed reform would clarify and expand the Court’s ability to make amendments to a trust in appropriate cases without all beneficiaries necessarily being parties or required to consent, subject to safeguards. 

The Policy Letter gives examples including a variation that benefits beneficiaries, but is blocked by one uncooperative beneficiary, or where obtaining all beneficiary consents would be "disproportionate". 

Hastings-Bass: back in focus 

Perhaps the most talked about proposal is the proposed statutory treatment of the rule in Hastings-Bass. 

The Policy Letter explains that the Royal Court recognised the rule as applying in Guernsey, but the UK Supreme Court’s decision in Futter v HMRC reformulated the rule so that inadequate deliberation must amount to a breach of fiduciary duty before the Court will intervene. The Committee notes that without statutory intervention, the Guernsey courts would likely follow the English position in Futter (albeit this is not known as, so far, the Guernsey Court of Appeal in particular has refused to take a view on this, preferring to reject Hastings-Bass applications on other grounds instead).     

The proposed amendment would reinstate the pre-Futter understanding of Hastings-Bass, so it would not be necessary to show a breach of fiduciary duty before the Court could set aside a fiduciary decision made without proper consideration. 

The Committee also proposes that the Court should be able to decide how an invalid use of a fiduciary power takes effect. It could treat it as void, give it whatever effect the Court considers appropriate, or treat it as having no effect from the outset. This deliberate policy choice favours a more flexible remedial jurisdiction. 

Privacy of trust administration proceedings 

The Policy Letter notes that trust administration Court applications often concern the internal mechanics of a trust and are not typically filed because of a dispute. The Law does not currently have express provision governing private hearings, so one need first to apply for a hearing to be conducted in private. The outcome can be uncertain and can cause delay and additional cost. Read more about the Guernsey Courts' stance on privacy in trust applications. 

The Committee considers that, while private hearings are a departure from open justice, the Law can expressly allow the Royal Court to make provision for private hearings and related matters, such as anonymisation of parties, trusts and trust assets. This allows for a clear and efficient pathway to private hearings where needed. 

While moving away from open justice must be treated with caution, in relation to trusts, this change should balance the desire to protect private individual's family and financial concerns from being unnecessarily shared. From a practice perspective, this change will assist those related to Guernsey trusts in being confident bringing proceedings in Guernsey if it is considered more respectful of privacy to ensure that sensitive matters are not available publicly.  

ADR and trust arbitration 

The proposed amendments will strengthen the role of Alternative Dispute Resolution (ADR). 

Section 63 currently requires ADR settlements to be recorded in a document signed by or on behalf of all parties before they can be binding. The Policy Letter notes that not all forms of ADR will produce such a document and proposes removing that requirement, while allowing wider use of ADR based on the trust terms or court orders. 

More significantly, the Policy Letter proposes expanding the types of trust disputes that may be determined by arbitration to include internal trust disputes between trustees, beneficiaries and other power holders. It also proposes that an arbitration clause in a trust instrument should, subject to any contrary order of the Royal Court, be treated as an arbitration agreement for the purposes of the Arbitration (Guernsey) Law, 2016. 

The Policy Letter recognises that safeguards would be needed, including a right for interested parties who have not expressly agreed to arbitration to apply to the Royal Court, and excluding third-party disputes from the scope of such arbitration clauses. 

What does all this mean for Guernsey? 

Taken together, the proposed amendments are a very useful and carefully calibrated update to Guernsey’s trusts legislation and will bring Guernsey into line with many other similar jurisdictions. The amendments ensure provisions are clear, suitable from a practical perspective, and read as was intended. This will help ensure Guernsey's trust legislation continues to be well suited for modern trust structures, ensuring the island remains competitive in an international market. 

For trustees, beneficiaries, protectors, enforcers and other related parties, the reforms should improve certainty across a wide range of familiar pressure points: fiduciary powers, trustee succession, delegation, remuneration, disclosure, liens, termination, variation, arbitration, limitation, mistake and privacy.   

They will help ensure Guernsey's trust legislation remains up to date, user-friendly and the legislation of choice for decades to come. 

How Ogier can help 

Ogier advises settlors, trustees and family offices on the establishment, restructuring and administration of trust structures across leading offshore jurisdictions.  

We regularly advise on the appointment and role of protectors, including drafting consent provisions that reflect the preferred approach in light of recent case law.  Our team also acts in court applications concerning trustee powers and protector consent functions, ensuring that trust structures remain robust, clear and aligned with clients’ long-term objectives.  

For more information on how the proposed amendments to Guernsey’s trust law could affect you, contact a member of our team. 

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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